Cash Back with jellyfish

December 21, 2006 |

jellyfish, a promising and somewhat novel addition to the Comparison Shopping scene is a combination of Upromise or the Discover card and Woot; they accomplish both giving you cash back on purchases while a discount on a deal of the day increases until the supply of that offer is sold out. Given the press I’ve seen for jellyfish, merchants would be wise to sign up, at least to leverage their comparison shopping engine capabilities.

Smack, the deal of the day, is a special event for customers and merchants creating excitement for a product by promoting it with an increasing discount on a limited supply. The cash back amount continues to increase until the product is sold out. Hold out longer for a better deal but risk someone snatching it before you get the chance.
A limited number of items are available for the day and once they sell out, the Smack is closed until the next. Remember though that the cash back model is
similar to that of a Discover card, you still pay full price for the product, jellyfish credits your account the amount consistent with the cash back available at the time you react.

The rest of the site offers a similar but static cash back promotion on all
purchases. Here’s where I get skeptical; consider the following:

- An iPod Shuffle lists 2.3% cash back on PCMall’s total price of $78.44 making it $76.78 (jellyfish explains that Total price is total store price plus tax and shipping if provided by the store)
The Shuffle at PCMall is $74.99 with at least $10.99 shipping or $85.98
- A 27″ Flat Panel HDTV from Audiovox is $808.89 on Buy.com
- Jellyfish gives you 2.3% back on $869.59
Apparently ‘buyer beware’ still applies.

The cash back is at least half of the amount paid to jellyfish by the merchant for the referral. Questionable math aside, I’m curious that looking at that iPod shuffle again, we see Crutchfield charges $86.98 with 14.1% cash back; they are paying a commission of at least 28% or $24. PCMall’s option is $78.44 with 2.3% cash back or 4.6% commission. They are paying jellyfish only $3.61.
But it’s not the commission amounts or the prices themselves that are questionable. Take those commissions out of the respective prices and Crutchfield’s take is down to $62.63 for the sale while PCMall makes $74.83.
Think of the insight jellyfish will have to merchant and consumer behavior. Clearly one is completely missing an opportunity by overpricing or missing out on the perception of substantial cash back or both are attempting slightly different models to woo the customer.
Is the inflated Crutchfield price with 14% cash back more attractive or does PCMall have the better model showing the lower store price and naturally better deal albeit with a less back for the purchase? jellyfish knows.

jellyfish is novel enough with attractive (but fairly standard) features such as price alerts and online chat support that I’m sold, as a merchant. Customers should be drawn to the promise of cash back but I sense a backlash if too many find it too confusing to determine a good deal.

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Tags: jellyfish, shopping

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1 Comment so far
1. dave on December 23, 200610:26 am
  Jellyfish has an interesting model for the deal hound, or “bottom feeders” as I like to call them. These are customers who are loyal to nothing but the lowest price. They will use your site/service until there is not more value in it, and move on. The reverse auction is a gimic that has been tried many times before. As for their core business (comparison shopping), have you seen how many merchants they have? Not enough to make this site useful.
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