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Loyalty CardsPopular mobile check in application Foursquare today launched a new pilot program with Pepsi and Safeway that integrates check ins with loyalty rewards, reports business magazine Fast Company.

The pilot could mark a new way for Foursquare to monetize using not just brands with physical locations, but now product brands.

The pilot will be tested at some 200 Vons grocery stores (owned by Safeway) in Southern California. Grocery goers will be able to link their Safeway loyalty program to their Foursquare accounts and earn rewards from swiping their card at checkout – launching an automatic check in (see below).

Several key benefits arise from this type of pilot. First, locations don’t have to train their staff on “What is Foursquare?” or how to redeem rewards. Second, Foursquare gets an automatic check in. No more having to spend resources reminding people that they should check in.

Third, and probably the biggest benefit, brands now has added incentive to participate in location-based services, like Foursquare. Brands will now have access into check in data and be able to push product to users based on their actions. For example, a check in at a gym could result in a free SoBe Lifewater or, if you’re a morning person, a Tropicana orange juice or Quaker Oats–all specials on PepsiCo products, redeemable at Safeway stores.

Foursquare is hoping that the new pilot will be a success and it can begin working with more loyalty programs and brands. For the time being it’s definitely a differentiator from competitors like Gowalla and Facebook Places, who remain focused on brands with physical locations.

Gowalla has experimented with loyalty programs before, having worked with Intercontinental Hotel Group. The summer program asked users who checked in to the company’s hotel chains to join the promotion for a chance to win. It’s a bit different from Foursquare’s pilot, but the program shows how brands may like to link their loyalty programs to check ins.

The New York City-based company, founded in 2009, has raised more than $21 million in funding and currently has more than 4 million users.

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