With StockBack, buyers who spend with participating merchants such as Patagonia, Dell Computer, Toys R Us and Brooks Brothers receive rebates of between one-half percent to 8.5 percent, with the option of sending the proceeds into a mutual fund. Robert Feidelson, CEO of Stockback, said the idea is to make consumers more vested in where they shop. And we give merchants another way to bring in customers. But the company has hired two high-level attorneys to take up the regulatory issues that need to be addressed. Feidelson believes that minimum balances on accounts and fees can deter many people from getting into the stock market.
Members can also invest directly in the fund without earning store credits.
Part of the appeal of the program is that members can buy shares by shopping and collecting cash rewards from merchants or by writing a check directly to the fund. According to Feidelson and Timothy Parrott, the president of Stockback, merchants are looking for new ways to entice people to buy online. The Internet lets people price compare. They need a new way to bring consumers onboard and this plan fosters customer loyalty and encourages consumers to make repeated purchases with merchants. Each merchant pays Stockback an undisclosed flat rate or percentage fee based on its agreement with the company.