Bumped: The new loyalty program that gives you free company stock

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bumped girl
Image Credit: Bumped.com
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Looking for a new way to invest that blends seamlessly with your lifestyle as a shopper when you’re out and about? Here’s a new app that will give you free stock with every purchase at participating stores!

RELATED: How much you need to save to be a millionaire by age 65

Introducing the Bumped app

There’s a new app called Bumped that offers a unique twist on traditional loyalty programs — it promises to reward you with fractional shares in partner companies when you spend your money at those businesses.

Shares of stock can be expensive. So rather than having to come up with, say, $300 to buy a single share of Chipotle stock in one transaction, Bumped offers an alternative. The app lets you build a small position in the stock every time you buy a burrito.

That’s the idea of a fractional share; it’s a smidgen of a share — rather than the whole thing. But it can really build up over time.

Think of what Bumped does as offering cash back every time you grab a cup of coffee, buy lunch or go to see a movie — only you’re paid in fractional shares instead of cash.

How does Bumped work?

The process is simple. But the first thing you need to know is that this service is still in beta testing. That means you have to sign up on a waitlist to get in.

Once you’re in, you would download the app to your phone and link your credit card to it.

Then when you make purchases at participating stores using that card, Bumped will automatically give you free fractional shares in that company.

bumped how it works

Bumped offers the ability to link your debit card up, too. But money expert Clark Howard isn’t a fan of debit cards for multiple reasons.

Going through the process described above will open an online brokerage account for you to house the stock you’ll receive.

If you’re concerned about privacy, you should know upfront that you’ll be asked to provide your full legal name, address, phone number, date of birth, Social Security Number, employment status, and income to open the brokerage account.

Additional documentation may be required if Bumped has trouble confirming your identity. You can read more about the onboarding process here.

Which retailers and businesses participate?

About two dozen brands across the coffee, fast food, home improvement, pizza and entertainment industries participate with Bumped at this time.

They include Chipotle, DirectTV, Kroger, Netflix, Target, Dunkin’ Donuts, Starbucks and Shake Shack, among others.

More brands will likely be added to the service as it grows.

How much free stock can I expect?

According to its homepage, Bumped says typical transactions might look like this:

  • Earn 9 cents worth of Starbucks stock for a $4.50 purchase at the java joint
  • Get 28 cents of Shake Shack stock for a $9.99 purchase at the burger business
  • Receive 76 cents worth of AMC stock for a $38 night out at the movie theater chain

What’s the catch?

The beauty of this whole thing is that there are no account or maintenance fees with Bumped.

The only time you would ever pay anything is if you wanted to transfer your fractional shares from Bumped to another brokerage. In that case, you would pay a fairly standard outgoing automated customer account transfer fee of $75.

How do I sign up?

Currently, Bumped is accepting new customers onto a waitlist during its beta phase.

Visit Bumped.com to put your name on the waitlist. The beta test just launched on April 10, 2018 so you can still be a very early adopter.

After the test concludes, the Bumped app will be available for both iOS and Android for anyone to download.

Heed this caveat

Just one word of warning…

Don’t use the Bumped app as an excuse to go beyond your budget when it comes to shopping. It makes no sense at all to spend recklessly just to get, say, a fractional share in Starbucks — especially if you’re on a tight budget or trying to cut down on the caffeine!

Likewise, it is a fool’s errand to spend $38 at AMC — and possibly pay interest if you don’t get it paid off by the end of your billing cycle — all in the name of owning 78 cents worth of movie theater stock.

Rather, you should only consider using Bumped as a supplement and add-on benefit if you’re already successfully controlling your spending.

RELATED: Budgeting 101: A step-by-step guide to taking control of your money

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Theo Thimou About the author:
Theo has co-written several books with Clark Howard, including the #1 New York Times bestseller "Living Large in Lean Times."
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