News

As Internet rewards gaming grows, winning gets harder

Maureen Duran spent countless evenings last year in the gray-blue glow of her computer, playing Money Wheel and other games on NetWinner.com.

For a while, payoffs from the Charlotte company were big: The Kannapolis bookkeeper won $375 in prepaid credit cards and gift cards to retailers such as Home Depot and Wal-Mart between October 2006 and October 2007, she said.

“It was kind of exciting to think, you know, maybe I'll hit something big,” Duran, 47, said.

Then, the games got tougher to win, and the prize bonanza dried up, she said.

Free online gaming and rewards programs are becoming more popular in these tight economic times, offering the promise of something for nothing for cash-strapped folks.

People often use the gift cards and cash they win for presents, clothes and staples such as prescriptions and groceries, experts and Web site owners say.

But as the industry has grown, so have accusations of fraud. Companies say people have started using stolen credit cards and automated machines to maximize their winnings, prompting sites to scale back payouts. And those cutbacks have caused players like Duran to cry foul and complain to the Better Business Bureau.

Memberships in many rewards Web sites have doubled in the past year. QuickRewards.net has grown to 48,000 members and adds about 100 more a day, owner Dmitry Beker of Brooklyn, N.Y., said.

“With inflation and tightening on your pocketbook, you might want to think about these programs, because they can stretch your dollars a little bit further,” said Kelly Hlavinka, managing partner of Colloquy, a company that tracks the rewards-program industry. “Customers are always looking for a good value.”

Online gaming and rewards programs are the latest incarnation of a concept started at airlines and hotels, which offer points redeemable for flights or rooms, based on purchases.

The idea spread to the retail and credit card businesses, and early pioneers such as FreeRide.com and MyPoints.com – sites that reward users for taking surveys and shopping – hit the Internet in the mid-1990s.

Today, the programs work in a few ways. Some reward purchases with rebates or points that people can cash in for prizes or money.

Others, such as NetWinner, which make their money from advertisers, give users redeemable points or cash when they spend time on the sites, playing a game, shopping or filling out a survey.

The number of online users has skyrocketed recently, said Becky Ford, who runs CompareRewards.com, a site that tracks and reviews online rewards programs. Her site visits have doubled since last year, she said.

“A lot of these folks are elderly or disabled or stay-at-home moms who wanted to be able to supplement their income,” Ford said. Competition among sites – and the economy, which is causing advertisers to scale back, making it harder for companies to pay their members – are crunching some rewards sites, which have shut down when they could not pay up or have cut costs by raising the number of points it takes to win prizes, she said.

Sometimes companies have had to increase their payouts because people have used fraudulent methods to accumulate points and prizes.

SunshineRewards.com, an Indiana site that pays consumers for shopping and taking surveys, restructured its site shortly after its inception to curb the use of stolen credit cards and false information, owner Tricia Meyer said.

Still, the 2 1/2-year-old site has done well, doubling membership to about 10,000 in the past year, she said.

NetWinner, which launched two years ago and has an office on South Boulevard near uptown, issued a statement to gamers last month saying the company was not in a financial position to fulfill prizes for which players had redeemed points, according to the Better Business Bureau.NetWinner President Allen Dean said Wednesday that the problem arose as the site gained users and fraud became rampant, with some gamers racking up big points by using multiple Internet windows and other improper methods. More than 40 percent of the people who complained were found to have violated the company's terms of service in some way, he said.

Company officials decided to restructure the site, giving away prizes in daily drawings, rather than guaranteeing prizes to every player who won a certain number of points.

The Better Business Bureau got 180 complaints from gamers, including Duran, the Kannapolis bookkeeper, who said the site – which claims to be “the most addicting flash games site on the net” and bears the slogan, “You play, we pay!” – owed her $150. She says she played legitimately.

“NetWinner was very appealing,” local bureau President Tom Bartholomy said. “It's not that (players) were living on this, but they started to have an expectation that it would be there every month.”

Company officials simply changed the site so it wouldn't be so easy to win, Dean said. Everybody who won instant-cash prizes and drawings has gotten paid and will continue to be, he said, adding that the company has given out more than 25,000 prizes since it started, ranging from $25 to several thousand dollars.

Dean said the complaints were a small fraction of the more than 186,000 people who have used the site in the past year.

“We apologize for any delays we've encountered,” he said. But “we're proud of what we've done. We think we've done some pretty innovative things over the past two years.”

  Comments