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Bumped is a unique brokerage and mobile app that lets you earn stock in the brands you buy. The concept behind Bumped is that for each purchase you make, you can receive a small amount of that company’s stock funneled back to you.
Founded in March 2017, Bumped is a technology company based in Portland, OR, with its service in beta testing. Founder and CEO David Nelsen says he hopes to create a social impact through equity. He points out that both consumers and brands benefit from this rewards system that builds relationships and loyal customers. When brands have strong relationships with their customers, they tend to perform better.
Bumped is generally a win-win app, but whether it will pay off for you will depend on your spending habits, namely if they include the 27 participating brands like Starbucks, Chipotle, Home Depot, and Netflix.
How It Works
To join Bumped, first you join the waitlist, and then the company contacts you when you’re approved. If you’re approved, you start by linking your debit or credit card to the app. Then, you spend as normal. If you’re buying from partner brands, you’ll automatically start getting stock in those companies.
When you’re approved to participate in Bumped, you can choose from preferred retailers within certain categories. All the equity you earn in a company is automated. Some media outlets liken what Bumped does to rewards or loyalty programs offered by retailers, except that instead of earning points, you earn equity in the companies you buy from.
Costs and Other Basics
When you spend with Bumped’s partner brands, you earn fractional shares, even if you’re already participating in other rewards programs. There are no fees for anything associated with Bumped currently.
Opening a Bumped account is free, and there are no maintenance fees, trading fees, or commissions. Bumped’s leadership does point out that they’re in the beta phase right now, and there is a chance that their $0 fee schedule could change.
As it stands right now, when you do spend money at partner retailers, you’re rewarded with anywhere from one to five percent of a share, and how much you’re rewarded is based on the company. The company sets this amount, and they make it on the higher end to attract people to shop and buy from them.
Pros of Bumped
As with other rewards programs, Bumped gives you the opportunity to earn just for shopping or buying from places you would go anyway. It’s also a unique way for people to get involved in the ownership of the companies they like and care about, even if it’s only in a small way.
The stock is free, and one of the biggest pros of Bumped is that it’s removing the barriers to entry that most people feel they experience with investing. It’s a low-risk, low-intimidation way to get involved in the stock market.
The creators of the app are quick to point out that Bumped is not designed for trading stocks, but about owning stock through the platform.
Cons of Bumped
There really aren’t any major downsides to Bumped. Like a rewards program, it has the potential to encourage overspending. Also, Bumped may not charge fees, but users concerned about their privacy should be aware that they are collecting user data that may be shared with third parties. This includes shopping and buying history. This isn’t uncommon, but it’s something to consider.
Also, keep in mind the stock kickbacks will be minimal. They are intended to be very small amounts that can add up over time. So, Bumped isn’t ideal if you are looking for significant stock returns.
Bumped is an innovative concept and well suited for someone who is new to investing and who wants to get started without a huge commitment or level of risk. While it has some minor concerns such as the potential to encourage overspending, it’s benefits of being a no-cost easy way to own the companies that you support with your buying habits is unmatched.
Author: Ashley Sutphin