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I saw a great article on the front page of last weeks USA Today Travel Section highlighting a number of Loyalty Auction Sites we are running with our Partner Points.com - "Out: Boring rewards. In: Dreams come true."

The article seems to indicate that these Loyalty Auction Sites are a new concept but the idea dates back to the late 1990's...

In the heady days of the dot.com world circa 1999, there was a brief flourish in the development and launch of points based online auctions – used primarily for promotional programs which were often tied to physical redemption of goods or services.

A good example of this is an early auction program for Coke and early programs for Miller Beer and Burger King.  The basic premise of these auction programs was the ability to include codes inside retail packages. Consumers would open the package and enter the code online. The codes would have pre-determined values or points associated with them which consumers could then use to bid via these branded online auction sites.

These programs were generally expensive to run and required extensive tie in to the packaged goods side of the business. They also required significant prizing budgets and fulfillment partnerships. As a result these programs did not seem to gain significant traction.

The real growth has played out on the loyalty side. Loyalty auction programs use existing loyalty or air mile programs as currency, with no retail product required for redemption. The cost to launch and operate these programs is significantly lower and most companies who utilize loyalty type programs are anxious to engage existing point holders to use them.

Starwood - http://auction.starwoodhotels.com/

Priority Club - http://auctions.priorityclub.com/

Posted at 02:33 PM in Auctions | Permalink