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Review of Bumped: Initial Thoughts on the Loyalty App that Rewards You in Stock

Bumped: the most passive way to invest

The wait is finally over. Yesterday, I got an email from the Bumped team saying that the app I forgot I had joined the waiting list for a few months ago is available for download! Bumped is an app that allows you to connect your credit and debit card, and receive rewards for any purchases made at participating companies in the form of that company's (or parent company's) stock.

After downloading the app, I was prompted to sign up for an account. After entering my email and password, it was time to link my cards. For my credit card through Chase, this process was extremely simple. I clicked the Chase logo (which was even at the very top), filled in my credentials all in the app, received the 2 factor authentication code, and it was linked up! Next, I applied for the brokerage account that allows you to actually receive and own equity. I entered the standard questions (e.g. date of birth, social security number, if my family member is a baller exec, etc.). Minutes later (9 minutes to be exact), I was approved. Then comes the fun part.

You are given a list of "loyalty selections" to make. These are brands that when you shop at them, you will receive shares of stock from them (or their parent company). Currently, there are 28 brands in 13 categories. Rewards from each brand give you between 1% and 5% of the value of your purchases with them. Unexpected for me, was that you could only select one brand per category to receive rewards from. For some categories, this was easy (Domino's at 5%!)

But for others, it was a bit harder to choose (Taco Bell or Chipotle, both at 2%). Be careful with these choices, since you can only switch them 3 times per year. I do wish the app had prompted me on this policy, possibly with a splash screen when you first go in to select your brands. While the 3 switches per year limit may seem like enough currently, it may become annoying once they begin to add more brands with different reward percentages.

To test out the app, I ordered a maple pecan latte from Starbucks (the only brand in the coffee category currently). After realizing that I had just used the balance on my Starbucks app instead of actually using my linked credit card to buy anything, I reloaded my Starbucks balance with my linked credit card.

The charge was shown as settled on my credit card account on Thursday by noon, the purchase showed up on my Bumped account by 2PM on Friday, and it currently shows that the stock has been ordered, but not settled yet. I expect the order to go through once the stock market opens on Monday, but I was surprised that it wasn't settled already, considering the market was open when the order was supposedly placed. For my $25 purchase, I'll be getting 75¢ of SBUX stock for free!

Overall, the design of the app is polished, fast, and intuitive. I do wish the processing of payments was faster to give me a bit more of instant gratification, but I guess that's on me for not calling J.G. Wentworth. I would recommend showing pending purchases on the app, to close this gap in the process that can take 3+ days.

I'm hopeful for Bumped and excited to see how it operates and develops. I'm especially curious to have these questions answered: Will it be able to efficiently deliver fractional shares? Will it allow people to buy and sell these shares easily? Will it handle refunds properly? How will it manage adding (or removing) brands and categories?

After my enjoyable experience with Robinhood, I'm looking forward to this app that is democratizing investing. Let's see how it goes! Make sure to check in for my follow-up review once I have used Bumped for a bit.

Published: Sunday, October 28, 2018


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