In less than a year, UPromise of Brookline, Mass., a rebate program for 529 college savings, has attracted more than one million members.

"That kind of success is unheard of," said UPromise spokesman Jim Doyle. "We are the fastest growing coalition loyalty program ever - faster than American Express' Membership Rewards, faster than American Airlines' American Advantage. Our program is working because we are able to surround consumers with savings opportunities and people are telling their friends," he said.

Doyle attributes his firm's success to the simplicity of the UPromise message: College costs are rising. Saving is tough. And while there's no such thing as a free lunch, earning a portion of what you pay for each cheeseburger to put toward college savings is a no-brainer.

It's even better if you can have that money deposited directly into your 529 account, which UPromise has arranged through partners Fidelity Investments of Boston and Solomon Smith Barney of New York. UPromise expects to announce additional direct-deposit partners later this year.

Of course, rebates come from much more than burger joints. In all, UPromise has relationships with more than 7,000 restaurants, 8,500 retailers, 100 e-tailers and 50,000 realtors. "Our corporate partners like the opportunity to promote a socially worthwhile cause while building customer loyalty," Doyle said.

Rebates from participating merchants -- which include General Motors, AT&T, CVS, Coldwell Banker, McDonald's,, Exxon and Citibank - range from 1% to 10%.

UPromise estimates that a family earning $60,000 a year -- which is the median income for American households with children -- could accumulate $8,000 over 15 years.

Family and Friends

Participants can also increase their savings by building a network of family and friends who direct their rebate dollars into the same UPromise account. The company estimates that if a family establishes an extended network and purchases such major items as houses and cars through UPromise affiliates, their savings could amount to $24,000 over the same 15-year period. In fact, Doyle noted that nearly half of UPromise's members are saving for the education of a family member or friend.

Unlike other college savings rebate programs, UPromise is free to members. The company generates profits from administrative fees from participating companies on each transaction.

EdExpress, another rebate program headquartered in Dallas, charges an annual membership fee of $20 and BabyMint headquartered in Atlanta, takes a percentage of the rebate issued to members. This amount varies, depending on whether the customer shops online or uses coupons. BabyMint declined to name the range [see MFMN April 8].

UPromise also handles record keeping for its members. Members simply register their credit cards with UPromise and participating retailers automatically deposit contributions into members' UPromise accounts.

Going forward, Doyle said UPromise's challenge will be to keep the program as simple as possible and to make sure that members make the most of their UPromise savings by opening a 529 account.

"Our goal is to help families save for college," Doyle said, "so our Website and newsletters are designed to educate people about the 529 opportunities. However, we've found that there's an inertia factor. The consumer has to get an application, etc. So, we're working on enabling investors to open a 529 account online. Also, when our members reach a particular savings threshold, UPromise sends a personalized message pointing out the benefits of directing the money into a 529 college savings plan."

In the meantime, UPromise is promoting its services through marketing at McDonald's and CVS. At McDonald's, UPromise is placing tray liners that proclaim, "Take a bite out of college costs." Next, UPromise is planning to place UPromise banners in the aisles of CVS. Next month, UPromise will launch its grocery program nationwide with rebates issued through registered customer loyalty cards on 4,000 items from brands, including Kraft, Keebler, Kellogg's, Coca-Cola, and Kleenex. The New England supermarket chain Stop n' Shop is expected to double the rebates UPromise members earn during a specified promotional period.

UPromise will also continue its road show. "The state treasurer of Illinois and I did a nine city tour where we did press conferences at CVS, ToysRUs and Borders Bookstores," Doyle said. "Illinois' treasurer, one of the highest ranking officials in that state, had a simple message. He told people they would be crazy not to join UPromise."

UPromise's 529 partners have come up with innovative marketing programs of their own.

"Solomon Smith Barney agents are going to baby fairs, toy store openings and shopping malls and helping parents to understand 529s and open up accounts," Doyle said. "UPromise gives them something to talk about with potential investors. Their affiliation with UPromise is an effective sales tool and a competitive advantage."

Finally, 529s are sure to benefit from additional publicity as UPromise continues to partner with firms like New York Life Insurance Co. "New York Life will offer a UPromise contribution with the purchase of insurance and annuity products," Doyle said . "The company is a valuable connection because they have 7,000- plus agents who are highly trained in personal finance and have strong ties to the community."

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