Startup's mobile money idea: Unearth forgotten card perks

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Credit card benefits aren't worth much to a consumer who has no idea what the card offers, or has forgotten about them over time and simply never uses them.

That's money lost in the eyes of Sift, a Sunnyvale, Calif.-based startup that has developed an app to strengthen mobile wallets by keeping track of card benefits.

Sift alerts cardholders to use benefits, but engages with card issuers on behalf of the consumer behind the scenes to make good on benefits that may have gone unclaimed.

It's that potential to save money that should lure most mobile wallet users to download Sift from the App Store as a monitoring tool on iOS devices, said Sift co-founder Janne Salminen.

"People use Sift for getting money back, to review what the benefits or policies are for specific purchases, such as how many days to return a product," Salminen said. "But it looks like many people have started using Sift it as their go-to shipment/purchase tracking tool."

That feature is not something Sift actively markets or promotes, but it does track shipment status with real-time updates. "It has been a pleasant surprise to see people really digging for those hidden features," Salminen said.

But it's the "hidden benefits" of credit cards that Sift wants in the forefront of a mobile wallet, as the app delivers an easy-to-read table of each card's benefits. While consumers generally understand and utilize cash-back or rewards points programs, they are not as keenly aware of benefits a card may have like trip cancellation protection, flight delay insurance, car rental insurance, lost-luggage insurance, extended warranty, theft and damage, return protection and price protection.

In that regard, Sift says its service can map all of the benefits for 90% of all credit cards in the U.S. In doing so and also filing appropriate claims on the user's behalf, Sift estimates it can help consumers get back "tens of billions of dollars left on the table every year."

Sift's biggest hurdle will likely be enrollment, since the consumers who would benefit most from its service are the ones who don't know what they're missing, said Richard Crone, chief executive of San Carlos, Calif.-based payments consulting firm Crone Consulting LLC.

"But you'd have to say an app like this would be a plus-one feature on a mobile banking app or on an issuer's own app," Crone said, hinting that the technology could be valuable to a future buyer. "As a stand-alone app, it can be hard to get an enrolled base."

From a "scrappy startup" standpoint, it is easy to admire Sift in what it is trying to do to benefit consumers, Crone added. "It will be hard, but hard is good if you are a startup that can solve a problem."

That "problem" in many cases, Salminen said, is that consumers aren't always aware that a transaction should have resulted in savings, based on their card benefits. If a benefit was not used on a certain transaction, Sift files claims to retailers or credit card issuers, depending on the circumstances of the transaction and the companies they are dealing with.

"Most of the retailers and some of the credit card issuers accept email claims, and we provide all of the relevant information in that way," Salminen said. "Others typically have online forms and we fill them out on behalf of the card user."

Sift usually needs to provide only a person's name, address and the last four digits of the card — all data that is collected when Sift makes its first claim for a user. Sift also provides the transaction receipt, and then proof of a lower price available.

"Sift puts all of this together without the users' involvement," Salminen said, noting that the company looks out for the card user without being asked to do so.

The app tracks all purchases in one place, matches the benefits to that purchase and then uses a bot to proactively deliver claims and alert consumers when they have money coming back.

Retailer refunds are direct chargebacks on the card used, while credit card refunds are chargebacks on the card or mailed checks, depending on the issuer, Salminen added.

After a user signs up with cloud-based Sift and provides an email address and retailer account information, Sift is able to obtain digital receipts, detect purchases and automate claims. Sift does not have access to card user email passwords on some platforms, but those they do have are converted to tokens and stored in an encrypted database.

Sift plans to make its free service available on other operating networks, but for the time being it works only for Apple users. The company is also testing various business models that would generate revenue.

"A success fee is one of those options, but it remains to be seen what the model, if any, would be with consumers regarding the claims," Salminen said. "In addition to that, we are going to make money from financial service referrals when we recommend a better credit card to a consumer."

While some companies such as Paribus and Earny focus on retailer price protections and Airhelp seeks refund claims through the airlines, Sift says it operates as a unique tool to make a mobile wallet stronger by unlocking credit card benefits, including travel.

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Mobile wallets Loyalty and rewards Credit cards