Bumped App Review - Earn Stock Instead of Cash Back

Credit cards give you cash back or airline miles. Ebates gives you cash back (or a “Big Fat Check” as they call it). But a new app called Bumped gives a fresh idea to the loyalty game: stock in the very companies you shop at.

What exactly is Bumped?

Bumped is a new loyalty service (“app”) that provides fractional shares of companies as you spend money at those same companies. The dollar amount of fractional shares you earn is comparable to other cash back programs - for me, various brands offer 1%, 2%, 3%, or 5% of the amount I spend.

Bumped loyalty selection screen showing percent earnable.

Bumped’s tagline on their website is:

Get free stock when you spend with the brands you love.

Fractional shares, no fees. So you can own what you love.

What brands are available?

The following are the categories and companies available to me in the Bumped app:

• Burgers
  • McDonald’s
  • Jack in the Box
  • Wendy’s
• Coffee
  • Dunkin’ Donuts
  • Starbucks
• Drug Stores
  • CVS
  • Walgreens
• Family Dining
  • Applebee’s
  • Chili’s
  • Olive Garden
  • Red Robin
• Grocery
  • Kroger
• Home Improvement
  • Home Depot
• Mexican Food
  • Chipotle
  • Taco Bell
• Music Subscriptions
  • Pandora
  • Spotify
• Pizza
  • Domino’s
  • Papa John’s
  • Pizza Hut
• Superstores
  • Target
  • Walmart
• Telecommunications
  • AT&T
  • T-Mobile
  • Verizon
• Video Subscriptions
  • Netflix
  • Sling TV
• Vineyards
  • Willamette Valley Vineyards

These differ only slightly from the list of brands on the Bumped support website. I’ve also noticed on some screenshots on other review sites brands that are not available to me, such a Burger King or Lowe’s. This may be a regional thing (even though there are Lowe’s and Burger Kings in my area) or maybe there’s no rhyme or reason why some people get some brands and others get other brands.

You can select one brand from each category. At first, I thought I could only select one brand total, but I can actually choose 13 brands since I have 13 categories.

Oh, and Willamette Valley Vineyards - which seems to be the odd one out of the brands listed above - is in Oregon, way far away from me.

What are the requirements to join Bumped?

Bumped is currently in beta and requires an invite. The invite is not as prestigious as it sounds - you simply have to sign up on the waitlist on the front page of the Bumped website.

It doesn’t take long, either. I joined the waitlist on a Saturday and received my invite two days later on Monday. I was even able to complete all the registration required (which includes signing up for their brokerage account) to start earning stocks on the same day - I even earned stock for purchases I made over the weekend since the transactions posted on Monday!

Since you do have to use their brokerage account in order to receive stocks, there are some legal requirements. Namely, you need to be 18 years of age, a U.S. citizen, or a Permanent Resident with a valid social security number. Yes, you have to provide your SSN. Uncle Sam will want his cut of anything you earn (more on this later).

Are there any risks to using Bumped?

Life is not without risks, and Bumped is no exception. I see two major risks to using Bumped:

1. You give up some privacy. This is true with any loyalty program. Bumped will, if they don’t already, undoubtedly mine your transaction data and sell the aggregated results in some form or another. Personally, this doesn’t bother me and I have no problem with loyalty programs doing this; you may have another opinion.

2. You have to link to your bank account(s), and that link could somehow become compromised. Thankfully, this is largely mitigated due to the fact Bumped doesn’t interface directly with your account via a service called Plaid. Bumped never has access to your login info. However, you do have to enter your username and password when linking your account, which is unnerving.

Screenshot of disclosure before you enter your bank login info.

There’s other risks as well, but I find them relatively minor to the ones above. The stocks you earn could lose value (potentially all the way to zero!). The stocks you earn could also do the opposite - which might make your tax situation more complicated! A lot of the stocks you can earn with Bumped are dividend stocks, so you will have to pay taxes on those dividends (which is not unlike paying taxes on interest earned with a savings account).

Taxes! Aren’t other referral programs tax-free?

Be forewarned about what I’m about to say: I am neither a tax expert nor a tax professional, so take everything I say in this section with a grain of salt. If a tax professional says something contrary, believe them before you believe me.

The IRS typically treats cash back and other rewards as rebates rather than income. The stocks you earn therefore would be considered rebates. You will only face taxable events in two situations: when you sell the stocks, or when the stocks earn dividends. When you sell the stocks, you should subtract their purchase cost from their sale cost and only pay taxes on the difference.

For instance, say you spend $100 and earn $1 in stock. That stock doubles in price to $2, and then you decide to sell said stock. That means you’d only pay taxes on $1 - the difference between the $1 you earned and the $2 sale price. Note that you could potentially pay less tax if the price drops in half to 50¢.

Again, I am neither a tax expert nor a tax professional. Consult a tax professional for tax advice rather than a random blog on the internet.

How much have I received?

Not much; but today is Friday and I only received my invite on Monday. I have $1.21 across Kroger, Home Depot, and McDonald’s:

Screenshot of my current balance.

Can you link a credit card with Bumped? Will you still get credit card rewards?

Yes, absolutely to both questions! In fact, do to the nature of how the rewards are processed for both the Bumped app and credit cards, the rewards stack. For instance, if you get 1% from Bumped and 1.5% from your credit card, you’ll get 2.5% total!

Don’t have a cash back credit card? Check out either the Chase Freedom Card with 5% cash back categories, 1% cash back everything else plus a $150 bonus. Or don’t want to worry about categories? Check out the Chase Freedom Unlimited with unlimited 1.5% cash back and a $150 bonus. Or do both!

Does Bumped have a referral program?

Currently, Bumped does not have a referral program. If and when they do, I’ll be certain to include a link both on this review and on my referral links page.

How do you join Bumped?

First, you have to sign up on the waitlist on the Bumped website. Once you receive your invite (it only took two days for me) you sign up just as you would any other service. You will have to provide your social security number (so tax-paying US residents and citizens only) and link your bank account. This is all through either the Android or iOS app - no website access right now.