Three online companies have come up with products that could help banks and adviser firms gather college savings assets by offering a compelling proposition: cash in the form of rebates from name stores like Barnes and Noble and Toys ’R’ Us.

"This is similar to an employer match on a 401(k) plan. Why should anyone miss out on free money?" asked Jim Doyle, a spokesman for Upromise, a Boston online broker-dealer. "This works because it is simple. You sign up, and you are saving for college just by buying gas, or eating at a restaurant, or shopping at a bookstore or a drugstore."

BabyMint Inc., an Atlanta company, started a college savings service, the BabyMint Financial Advisor Program, last Thursday. With this offering, BabyMint joins competitors Upromise and Dallas-based EdExpress in looking to expand distribution by offering its product through financial advisers.

"This is a win, win, win situation," said Peter Davis, BabyMint Inc.’s founder and CEO.

The programs let members save, over 18 years, from $10,000 to $50,000 toward a child’s education by earning rebates at stores nationally. The prospect of "free money" has some advisers looking for a catch, and surprised to find there is none.

The three companies earn their money in different ways. EdExpress charges members a $20 annual fee. BabyMint takes a percentage of the rebate. Upromise earns revenue by collecting broker-dealer fees on each transaction.

"It is a natural tendency to look for the catch, but then you realize that this is just a great marketing tool for the vendors," said Joseph "Joby" Gruber, president and CEO of SunAmerica’s FSC Securities Corp., which has a distribution agreement with BabyMint. "This is one more value add-on, one more access point for parents and the grandparents.

"We looked for the hook," Gruber said, "but unless I am missing something, we haven’t seen it."

Beginning in March, SunAmerica will offer BabyMint’s service to its customers.

Gavin Little-Gill, an analyst at TowerGroup, a Needham, Mass., research firm, said that, with college savings having the potential to grow by $450 million a year, banks and advisers are looking for ways to enhance their 529 products in order to compete for customers who could just as easily use another firm.

"These programs in and of themselves are terrific programs. They are doing wonders for 529 plans," Little-Gill said. "They are creating interest around the programs. For intermediaries they are creating excitement, and they are creating leads to new business."

He said the product increases activity between the average customer and his or her financial adviser. The average person contacts a financial institution 1.2 times per year per account, he said, and Upromise, BabyMint, and EdExpress help raise that average.

"This is another tool in the toolbox," Little-Gill said. "You are able to bring in assets, increase interest in products, and put the adviser on the same side of the table as the investor."

BabyMint, which began distributing its rebate product through its Web site last March, tracks online purchases and offers customers coupons; Upromise and EdExpress track credit card purchases to give customers’ rebates. For example, if a Upromise customer made a $100 purchase at Toys ’R’ Us, $20 would be put into a 529 college savings plan.

Davis, who worked for Procter & Gamble for six years managing its Pampers and Love’s brands of diapers, said large retailers and service providers have large marketing and advertising budgets that pay for the program.

"Instead of spending money marketing or advertising they are buying customer loyalty," he said. "They are rewarding the customers where they need it most — college savings."

Each of the three online companies has distribution partnerships. BabyMint has a partnership with Alliance Capital, in addition to its deal with SunAmerica’s securities unit, and offers the former’s CollegeBoundfund. EdExpress works with KPMG Consulting Group, and Upromise, with Fidelity Investments and Citigroup Inc.’s Salomon Smith Barney. Upromise also offers a credit car that is cobranded with Citigroup.

Kyle Brizendine, chairman of EdExpress, said his firm and BabyMint, unlike Upromise, operate as marketing organizations, not broker-dealers. This gives customers the freedom to use any adviser for opening a 529 college savings plan.

"We view Upromise as our prime competitor," Brizendine said. "We think the differences will help investors make an informed decision."

BabyMint offers customers NestBuilder bonus coupons that give them savings at the supermarket cash register and instant deposits into a 529 plan. For example, a person buying a box of Kellogg’s cereal might save 25 cents at the register and have $1 deposited into a college savings plan.

Upromise’s Mr. Doyle said his next step is grocery store purchases. In April, his company will expand a plan to let people get rebates, through registered customer loyalty cards, on 4,000 items from brands like Kraft, Keebler, Kellogg’s, Coca-Cola, and Kleenex. Already, the plan is available in New England Stop ’n’ Shop stores.

"Grocery stores are an important next step," he said. "These are purchases you have to make, week in and week out. That will lead to substantial savings."

The three companies said membership rises daily. In November, BabyMint said, 20,000 people joined, compared with 500 in the company’s first month.

"We are all working together here," Mr. Doyle said. "It isn’t a matter of which company to open a plan with; it is whether to open at all. We are making it easy by doing it online and giving them the incentive to get through the

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