A new app is seizing a $50 billion opportunity to save shoppers weeks of frustration
"We were invited to a fancy gala in San Francisco," they tell Business Insider. "So we went to Zara to buy blazers."
Yona found one for $129. Vakrat passed and ended up borrowing one from a friend.
"I decided it was a bit expensive," he explains. "A few weeks later, I found the same exact blazer for $65 and bought it."
Feeling ripped off, Yona dialed up his credit card company: "I pretty much disappeared for a week and I did the very long and inefficient price protection process. Bottom line, I was able to get the $65 back two months after my purchase."
Price protection policies are different depending on your credit card, but essentially, if you buy an item and find a lower price within a certain time period after the purchase, your card issuer will refund you the difference.
According to Yona, the process was a major hassle. That's probably why so many consumers don't even bother.
In fact, there is an estimated $50 billion in unclaimed savings each year in the US alone. Many consumers aren't aware of price drops, or even of the price protection policies offered by many credit card companies. Even if they are aware, the paperwork required for refunds can be daunting.
Shortly after the blazer incident, Yona and Oded Vakrat, along with cofounder Ilan Zerbib, put their heads together, and a year later, they presented their own solution to the public: Earny, an app which aims to get consumers their money back for discounts on past purchases.
Previously, consumers like Yona could get their money back through price protection, but it hasn't been automatic. On NerdWallet, Ben Luthi points out that "depending on your card issuer, you may have to register the item for them to track or track the price and file the paperwork yourself to get your refund."
That's where Earny comes in. The app launched early May and is designed to automatically track your purchases, find better prices, and file refund claims.
After downloading the app, you enter your email so Earny can track your online purchases and find your e-receipts. If you didn't get the best deal, Earny finds a lower price, requests a refund, and the difference is credited back to your original payment method. If you have an Amazon account, you also enter that information, as Amazon is the only online retailer that doesn't send you a receipt, the cofounders explain.
"It's complete set-and-forget methodology," says Michael Jones, CEO of Science Inc., one of Earny's investors. "You get a notification every once in a while that they saved you more money."
The app is free, but the company takes 25% of each of your refunds (besides the first, which is free). It seems like a generous chunk, but, "The way we look at it, this is money you would have otherwise never gotten," the Earny team explains. "This is money that is left on the table."
Currently, Earny tracks purchases from 50 major retailers, including Amazon, Target, Walmart, and Best Buy. "That's more than competitor Paribus tracks at this time, which is 20 (soon to be 30, we're told)," TechCrunch reports. "However, Paribus has since expanded to include more features than Earny offers currently, including a 'deals' feed based on the savings it has been finding for customers."
There are a lot of companies that think about how to protect customer pricing, Jones tells Business Insider, but, "there are a few reasons why I got excited about Earny as an investor is.
"First, they're not interested in trying to make me buy more things. They have a singular focus, and that's retrieving money that's owed to me. Second, they have the largest retail coverage right now. Third, they have a fairly unique relationship with credit card companies, and I believe over time, they will not only be great at discovering where I overspent, but also understanding that applying for price protection is not just through the retailer, but also potentially through my payment source."
The five-person Earny team recently moved from San Francisco to Santa Monica, into Science Inc's headquarters.
Whether or not you decide to give Earny - or Paribus, which also takes a 25% cut - a try, it's important to be aware of the frequency at which prices change.
"From our initial data, almost every item drops in price," the Earny team explains. "Amazon, for example, has over 2.5 million price changes per day, so consumers are missing out here."
Chances are, you've overpaid for something recently, and it's more than possible to earn your money back. If the phone calls and paperwork are too much of a hassle, perhaps an app could be the answer.