Upromise: One Bad News and Two Redeeming Factors

Last week, I wrote about Upromise, a program that gives members cash back for purchases at certain stores, websites, and restaurants, which can then be transferred to Sallie Mae student loan accounts or 529 Plans.  But here’s an update, straight from my inbox: As of July 1, 2009 (never mind that I only got the email 5 days later!), store purchases at Bed Bath & Beyond are no longer eligible for the program, though the cash back rate for purchases on bedbathandbeyond.com was raised from 1 to 2%.  This is a pity since the 1% cash back given at BB&B stores only sweetened the deal when combined with the store coupons that come in the mail every couple of weeks (20% off an item plus another 1% cash back), but certainly does not negate the other benefits of the program.

For starters, here are two other great things about Upromise besides those mentioned in the previous post: (1) Upromise often lists coupon codes for its member stores, which can be used even if you’re not shopping through its program (e.g., you can buy online through ShopDiscover but use a coupon code you found in the Upromise website); and (2) apparently the cash accumulated through Upromise does not have to be used exclusively for education expenses, despite the program’s professed purpose.  In the small and difficult to find FAQ section, the program notes:

Upromise was created to help families save for college and we strongly encourage members to use the money they’ve earned towards education expenses. However, members may choose to withdraw the money they’ve saved for other purposes if they wish.

Now, besides the fact that you won’t be getting 1% cash back at Bed Bath & Beyond stores anymore, what else is keeping you from signing up for Upromise?

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Paying for Education, One Purchase at a Time

If you have student loans to repay to Sallie Mae or are trying to save for education through a 529 Plan, you may want to use Upromise to help you out.  Upromise is a service that gives you cash for certain purchases from grocery stores, restaurants, online retail sites etc., which can then be transferred to your student loan account or 529 Plan – essentially a cash back program under which the cash is redeemed for education expenses.

To be honest, the cash back rates for Upromise are generally lower than most other programs such as ShopDiscover.  However, Upromise covers a much larger number of merchants and combines different programs to generate even more potential rewards.  Discover’s 5% cash back at Target.com and the Apple Store, for example, beats Upromise’s 2% and 1% rates at these online sites, respectively.  Upromise, however, offers 2% cash back on eBay and 1% on several travel sites, such as Orbitz and Travelocity, while Discover has not partnered with those sites as of yet.  Furthermore, Upromise also gives up to 8% cash back on restaurants that belong to the Rewards Network (for a full list visit rewardsnetwork.com) and on in-store purchases at a few places such as Bed Bath & Beyond (1%) and the Sunglass Hut (6%).

Upromise also allows you to add your grocery cards to your account, so that you get cash back on Upromise for certain items on top of your grocery stores’ discounts and/or points.  Participating stores include Safeway, Harris Teeter, and CVS.

Now the best feature of Upromise I think is that it allows you to add friends and family to your network.  That is, if they create a Upromise account and add you as a beneficiary, they can use the cash back program to help you pay for your education.  Alternatively, for online shopping, you can simply send them a “guest shopping” link, so that they do not even have to sign up for Upromisem but you can still earn cash on the program whenever anyone shops through that link.  So if your mom usually does the groceries and uses store cards, you may want to have her sign up for Upromise and help you pay off your loans; and if your grandparents are coming to visit, you might to want to send them your Upromise “guest shopping” link so that their trip can help you get some money into your 529 Plan.