A new spin on loyalty discount cards
Edhance tracks college students’ purchases at participating businesses, then issues a credit, without adding work for the merchant
Cash-strapped college students looking for discounts without the hassle of coupons and mail-in rebates can tap into a website launching this month to score exclusive deals with merchants like Apple, Qdoba, and Barnes & Noble.
The new site, www.edhance.com, was founded by Bjorn Larsen, a local entrepreneur who previously created StudentUniverse.com, the largest online provider of discounted airfares to college students in the United States.
Edhance, a start-up based in Cambridge, borrows the technology from StudentUniverse to enroll students with up to five credit or debit cards and verify identification with colleges. Edhance’s software tracks purchases on these cards so students automatically receive cash back whenever they buy items at merchants partnered with Edhance. It takes about a week for the money to get deposited in the students’ accounts.
“There’s no points or other gimmicks. Students just want the hard cash,’’ said Larsen, 27.
Companies covet college students because they represent a huge market of more than $120 billion in annual spending, according to the most recent
Edhance is different from other student discount programs that offer loyalty points that can be hard to redeem. Some companies like Student Advantage charge membership fees which is not appealing to all bargain-hunting college students.
Edhance makes its money by charging a commission to merchants whenever students make a purchase. The commission typically ranges from 2.5 percent to 4 percent and it is charged on top of whatever discount is offered to students.
“There are no fees, no monthly fees, no marketing fees. We only make money when merchants make money,’’ Larsen said.
Because Edhance is doing the work to enroll customers, verify their identities, and track purchases, some retailers who otherwise do not offer student discounts are willing to join the program. Other merchants, such as Apple, are promoting even larger discounts through Edhance than what is typically offered. For example, Apple offers a 10 percent discount for students, but shoppers purchasing merchandise with a card registered with Edhance will receive an additional 4 percent discount.
Matt Weiss, marketing director for the franchise that runs Qdoba Mexican restaurants in Massachusetts, said the student market is extremely important to build customer loyalty and it’s one of the larger demographics in Boston. While the store offers various promotions aimed at college students, it is sometimes cumbersome for cashiers to verify identification.
Edhance makes it easier by doing it on the back-end and the program can measure how students are responding to the deals so it can tailor discounts. Qdoba is considering offering different promotions, including free chips and queso, or buy one get one free.
“That’s what’s great about this program - it’s all managed outside of the store,’’ Weiss said. “And we can design promotions that are school specific or grade specific and change it on a weekly basis. Students are quick and savvy to know where the best discounts are, and Edhance appeals to the student mentality.’’
Edhance is planning to launch the website in mid-August with about 50 different promotions from local and national merchants including Puma, eBags, Sketchers, and Berk’s Shoes in Harvard Square.
In the coming weeks, Edhance plans to unveil marketing campaigns on campuses and online to attract more students to the program. It already has about 700,000 students enrolled through a partnership with a financial services company which it declined to name. Edhance agreed to take over the company’s loyalty program that offered MasterCards to students across the country for disbursement of student loans.
“For companies like Barnes & Noble and Apple, establishing a relationship with 18-year-olds can potentially be the beginning of a 50-plus year business relationship which makes it worth paying some money for,’’ said Mike Tesler, president of Retail Concepts, a consultancy in Norwell.
Jenn Abelson can be reached at abelson@globe.com. 
