One day in 2020, Arne Nostitz-Rieneck, a Viennese film director, was buying groceries when the store cashier asked if he wanted to use his loyalty points as payment. He had no idea such a thing was possible, having always thought that the points were useless.
To his surprise, they covered more than €40 of his purchase. As he walked out of the store, a homeless man asked him for spare change. Arne never carries cash, and had to say no. But a thought hit him: What if he could have given the man the points that were of no value to him just moments earlier?
“From there, it became more and more clear that there is so much money hidden away in that point system,” says Arne.
Indeed, according to the 2023 On Point Loyalty report, the world’s top three frequent flyer programmes are worth more than $70 billion combined.
“When you take all the points that people are not using and compare that to the amount of people living on the street – just taking that value and funnelling it to them would eliminate the problem.”
Later in 2020 the Vienna Business Agency held a competition asking for creative ideas on how to improve life in the city. On a whim, Arne submitted his idea of donating the cash value of loyalty points to people in need and won a grant for it. He subsequently created a startup, SocialCard, for homeless people who don’t have access to bank accounts, smartphones, or the digital payment society.
SocialCard was a finalist in the European Investment Bank Institute’s 2023 Social Innovation Tournament, which acknowledges social entrepreneurs making positive social, ecological, or environmental impact.
Loyalty points bring social integration
The European Commission estimates that about 4 million people in the European Union experience homelessness each year. In the United States, where the social net is looser, a person can end up on the streets in a matter of weeks.
One summer in Los Angeles, Arne met a young woman living with her two kids in a tent. She had twisted her ankle, which led to her losing her car, her job, and ultimately her home. “Once you’re on the street, you just try to survive,” says Arne. “Your horizon is closing in, and you’re in this very small world with no way out.”
He notes that traditional loyalty programmes are a transactional game where consumers buy things, earn points that encourage them to buy more, earn additional points, and so on. “What we are introducing is an emotional attachment, connecting loyalty clubs to social impact,” he explains.
The SocialCard concept has a few different parts. On one side, the startup distributes cards with QR codes to people living on the street. On the other, consumers collecting loyalty points as they shop or travel can transform the points into their monetary value by making a peer-to-peer donation, using their smartphone to scan a beneficiary’s QR card.
It’s a win-win all around: The recipient can use the card immediately to pay for food, shelter, medical attention, and so on. For the donor, it’s easy to make a small difference in someone’s life without spending their hard-earned money. And for merchants, the initiative can draw a new customer base with a loyalty club that works for good.
Creating a wormhole
Currently, SocialCard is still in its pilot phase. Arne is in discussions with loyalty clubs in Austria, though he has yet to sign one up. There are many details to work out – how much each point is worth, how to integrate the programme into existing point of sale (POS) systems, transaction fees, and so on.
“When I had the idea, it seemed easy,” he says. “Two weeks of programming, a little bit of networking, and it’s out the door. But no. This whole online transaction world, the rules and regulations, it’s a universe of its own. Then there’s the second universe of loyalty clubs, where everyone is different. And finally, there’s the universe of the people on the street. We are trying to create a wormhole between these worlds.”
Currently, Arne is testing the QR cards in Salzburg, in partnership with a local street newspaper, Apropos, sold by vendors who struggle with homelessness. Apropos’ editor, Verena Siller-Ramsl, notes that the first vendors to test the system have found it fast and simple. She says some of the other vendors are skeptical, “but we hope that over time, the first movers and their experience will convince the rest.”
Changing mindsets to change the world
Arne has devoted himself to working on SocialCard full-time, without a salary for now, and with the help of seven other volunteers. He was hoping for private or government funding this year, but it hasn’t come through. “It’s quite challenging at the moment,” he admits. “We are discussing how we can continue, as paying customers are probably two years away.”
He believes that if SocialCard can get past this difficult phase and start demonstrating the potential impact of his idea, more loyalty clubs will want to join, and the pay-off will continue to grow. Eventually, he would like to create a loyalty club of loyalty clubs, where companies pay a yearly fee for membership and all its benefits: participation in social impact, improved corporate social responsibility, and an expanded client base.
Thinking back to the young mother he met on the streets of Los Angeles, Arne says, “I realised that this mindset shift we are trying to achieve, from a cashback to a cash-forward society, could lift her out of her situation long enough to gain a new perspective, find a new job, and support herself and her kids again. That was the tipping point for me, where I decided this could actually have an impact on people’s lives that would go beyond a bit of pocket change and create real change in the world.”
