KarmaKey uses phones to build better loyalty programs

A new startup called KarmaKey wants you to throw out all your loyalty cards.

You’ve probably got a few of those cards in your wallet right now, usually offering you discounts or freebies at your favorite stores if you make a certain number of purchases. Now, instead of making you carry a card around, restaurants using KarmaKey print out a special code on your receipt. You enter that code into the KarmaKey mobile application, and you can redeem it for a discount or other deal at the store.

This is good for customers, KarmaKey said, because you no longer have to store a bunch of extra cards in your wallet. It’s even better for restaurants, because they now have data about their loyalty programs, showing who redeems what coupon and when. That helps them figure out which deals are working and which are not.

So how is the company actually going to get stores on-board with this plan? KarmaKey says it’s partnering with the companies selling point-of-sale systems to these stores. That should give the company a lot of credibility and also help it reach stores at a point when they’re ready to spend.

As another example of tying loyalty programs to mobile phones, you can read our coverage of Foursquare’s partnership with Safeway last fall.

KarmaKey demonstrated this morning at the Launch conference in San Francisco.

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