MoLo Rewards has launched its mobile rewards programme in the cities of San Diego and Toronto.

First announced at DemoFall in September 2009, the service uses contactless stickers attached to users’ mobile phones to identify them at the point-of-sale. These are distributed free of charge to consumers when they make their first purchase at a participating merchant and will also be mailed out by MoLo Rewards on request.

To take part in the programme, consumers sign up for an account and download a MoLo Rewards app from the company’s website. Then, when they wish to take advantage of a special offer, they simply tap their phone at the merchant’s point-of-sale to redeem their reward.

MoLo is offering two types of rewards, both mobile coupons and a deal of the day that provides a substantial saving provided a minimum number of people take it up. Consumers also earn MoLo Points every time they make a purchase.

For marketers, MoLo also offers highly targeted marketing campaigns based on consumers’ previous spending habits. “Want to send a coupon to a consumer who purchased a box of cereal on the 21st of December at 11am EST?,” says the company. “MoLo Rewards can provide you with the capability to do just that.”

“We are using Mifare RFID stickers, so no it is not full NFC,” Robert Sprogis, CEO of MoLo Rewards, told NFC World. “But of course once NFC devices enter the market our solution will support and work with these NFC phones. Our suppliers change so I can’t name names at this time, but we are currently using ACR122 readers at the point of sale.”

“San Diego and Toronto were selected for various reasons but chief among those reasons was they served as excellent test markets given the current market conditions,” says Sprogis. “We will be engaging in marketing campaigns in the coming weeks and are in talks to form strategic relationships in our current and future cities.”

MoLo Rewards doesn’t charge companies to add a coupon to their system. Instead a fee is charged each time a user downloads a coupon to their phone and each time a coupon is redeemed. “The exact costs vary depending on the retailer and are either fixed costs or a percentage of the item being purchased,” Sprogis explains. “However, the typical coupon in say a grocery store would be a flat fee of $0.10-$0.50 per redeemed coupon.”

Deal of the day offers work in a slightly different way, however. “If a deal sells we take a percentage of the gross revenue generated from the sale of the deal, a commission which ranges from 30%-50% of the gross revenue,” says Sprogis. “Our entire solution is designed to enable retailers and marketers the ability to market their products/company at zero upfront cost and zero risk. MoLo Rewards only generates revenue if the retailer or marketer makes money.”

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