Michael on April 17th, 2009
Bookmark and Share

I don’t like to talk disparaging about other people or other companies.

You: So I’ve noticed.

Life is too short and the world is too small.

You: But you’re going to bad-mouth Upromise anyway?

No, I don’t really have an issue with Upromise itself.  However, I am concerned about some of the people who have Upromise accounts.

You: Why?

Two reasons. First, because I’ve been asked various times at different speaking venues about my thoughts on Upromise as a key savings vehicle for college.

You: And the second reason?

Because I just received an email from Upromise on April 3 that began:

Dear Upromise member:

Congratulations — you’ve earned over $25 in your Upromise account.

You: Okay, so far so good. What’s the problem?

Here’s the thing: My former employer Toys “R” Us was, I believe, among the very first big merchants to join forces with Upromise (it was also one of the first big ones to discontinue its affiliation).  As a result of my Toys “R” Us employee status and my financial bent, I decided to join Upromise and opened an account way back in May 2002.

You: That’s almost 7 years ago.

Indeed. My first daughter wasn’t born until nearly three years after I started participating with Upromise.

You:  That is an early start for college saving.

It was an early start to think about saving for college. But participating in Upromise is NOT saving for college.  Let’s be clear: Upromise participation is nothing like the miracle of compounding interest. There’s not much miraculous about Upromise. The premise is pretty simple: if you spend some of your everyday money with certain merchants (like Bed Bath and Beyond) and/or on certain products (Keebler), you’ll receive a small increase to your Upromise account.

You: How small?

Microscopic. And therein lies the problem.  After seven years of Upromise participation,

You: You have over $25!


You: How much over $25 do you have?

I have just under $50 in my account at this moment.  At this rate, when my oldest reaches college, I should have enough to buy her about three-quarters of one textbook.

You: So does Upromise suck? Should I quit Upromise?

No and no.  There’s nothing wrong with accepting free money and this is fifty bucks I can use in 15 years that I did nothing to earn.  For that I am grateful.

Still, some people do get excited about UPromise. When they do so in my presence, I politley tell them to calm down and explain to them how little it will matter in the end.  More important, I explain, is look at and begin saving within a 529 plan.  (Upromise says they can help with that too.) Not surprisingly, most of your kid’s education isn’t going to be paid with fruit crackers, it will be paid with the fruits of your labor.

At the end of the day, buying one text book used instead of new will do more to ease your college financing dilemma than Upromise will.

Have you checked your Upromise account balance lately?

Bookmark and Share

Tags: , ,

11 Comments to “Upromise underdelivers”

  1. Michael-

    I have to say that for someone who was involved and aware of Upromise and how the program works I am disappointed in you. Upromise isn’t about being passive and expecting money to show up in your account. Upromise is about leveraging your spending and making intentional choices as a way to grow your account balance. I personally have over $5,000 in my account in about the same time period since you joined. When I shop online I start at Upromise. When I dine out I try to use Upromise restaurants. I take surveys through eRewards and have earned over $150 alone in the past year. Upromise isn’t the holy grail in college savings but it can be a great way to earn money for things you would have done but are now doing a bit differently – doing them with Upromise’s partners. So in my opinion, it isn’t Upromise that underdelivers, it is you.

  2. Michael says:

    @Evan: I’m glad you were able to avoid a personal attack in your first ever post to this blog. It’s also refreshing to see that your work experience includes three years at Upromise, making you an unbiased participant in this discussion. Also, thank you for taking the time to carefully read my post above which clearly indicates that, while there’s nothing wrong with Upromise, it’s not the answer to your college funding prayers. Similar enough to your own concluding comment (the one before your final sarcastic remark)?

    I’m thrilled that many people, including you, can get some money for the future college education of your children for the purchase behavior you do ordinarily. In addition, you appear to enjoy taking surveys for Upromise compensation – great.

    My point (and yours best I can tell) is that it’s going to add marginally at best to your ability to pay for college. Upromise is a nice little side-perk – nothing more. I talk to a lot of people who previously believed it was doing far more and I’d rather alert them to reality now even if it offends your loyalty marketing platform a wee bit at the same time.

  3. Diana says:

    I’m just wondering when someone can start a 529 plan? Do you start one when you have a kid, or can you start one before you have one? I heard from a friend that if you start a 529 plan, it is tax-deductible up to a certain amount and remains tax-deferred even when you use for your kid’s college expenses…?

  4. Michael says:

    @Diana: Thanks for your questions which certainly have identified the need for a near-future blog post all about 529s! To answer your questions:

    Yes, you can start before you have children. To do so, initially identify yourself as the beneficiary and then switch it to your child after he/she is born.

    Contributions aren’t deductible for federal tax purposes but may be, up to some limits, on your state return. (This varies by state). There may be other state level incentives as well.

    Assuming you use the funds for college expenses, you’ll never pay taxes on earnings made within the 529 plan (so it’s actually better than tax-deferred, it’s tax-free!)

  5. John says:

    Michael, I too believe that Upromise is more of a hype than a help. I had an account with them trying to get some help paying down my student loan. I have spent thousands of dollars on their partners and yet I have only 63 cents to show. And not all their partners really participate. For instance I bought a home and my Realtor was on the list yet they said oh it is only if you buy a specific home at a specific dollar amount, blah blah blah. I am just wondering how much money these people spent who said that they have lots of money from Upromise? I bet they have spent even more and they are forced to buying items only from their specific vendors which you said you did. So who is the winner here? Definitely not the consumer. It is the partners and Upromise who share in the profits. Instead of signing up for them and hoping you will get money, stick that money you were going to purposely spend on a specific product into a savings account. What I mean is you spend $40 on Pampers when you could spend $30 on Huggies and save that $10 in a savings account. Now add that to the interest you for 90 days because that is the average time that it is posted to your Upromise account, you will net approx $10.03 at 1.25% interest. How much did Upromise and pampers give you? I am guessing 40 cents. So let’s look at the bottom line here. Would you rather have $10.03 or $0.40 saved toward your child’s college? Now you know why Upromise sucks.

  6. Michael says:

    @John: Good point. It’s like those of us who spend more money on a credit card because of the points or cash back. If you’re going to spend that amount anyway, great. But if it causes you to spend more, you’d have been better off without the spending and without the rewards. On average, consumer lose – or they wouldn’t keep throwing rewards our way, right?

  7. Michelle says:

    I’ve had a Upromise account for several years. Initially, I added one or two grocery cards along with all of my credit cards. I do not put any effort into going to upromise.com and trying out its various deals (sounds like an incredible hassle), but this morning I checked and in the past several years have saved a whopping $1.99. However, upromise doesn’t forget to send me an email every couple of weeks. I think it’s an incredible waste of time/effort, actually. I do ship at so-called partners and use my registered cards but basically nothing ever hits my account.

  8. Suzanne says:

    I am quite irritated when I find that drugstore.com doesn’t ever seem to credit me for LARGE purchases, only the little ones… and it’s just so much friggin work to get a copy of the invoice and fax it along with a form to UPROMISE to GET the dang teeny percentage, that it’s not worth my time. And I suspect the merchants know it, so they have no problem NOT forking money over to UPROMISE on my behalf. Since I use the turbosaver toolbar, you’d think UPROMISE would be aware of my purchases and have some way of enforcing… but no, it’s all on me. If a class action suit wasn’t so difficult, I’d be the lead plaintiff on one against them. The random possibility of actually getting the UPROMISE contribution does influence my buying behavior, and its possible I’ve missed better deals by buying at Staples over OfficeMax or whatever. If anyone asked me, I’d say don’t even bother… the amount of time you spend entering in all your cards, and making sure you use the toolbar or go to Upromise.com first…. you should find ways to make money on your own rather than do this, especially when merchants and/or Upromise screw you over. Now that I think about it, I think I sent a letter asking for a withdrawal months ago… don’t think I ever go that either…. here I go, have to contact Upromise again.

  9. Mike says:

    Upromis is horrible! Flat out. I think it is more of a data retrieval site than it is about helping kid’s with college. I could clip coupons and keep the money saved and earn probably about 200% more money for my kids college funds.

  10. danielle says:

    Upromise is a great tool if you are already spending. I opened an account 10 months ago, and wish I’d done it years ago. In 10 months I have $605 accumulated cashback that is directed to my daughters 529.
    All online purchase for myself and my job go via the links on the upromise site. If I find a better deal elsewhere, I’ll skip the 5% savings, but often with the upromise coupons too, I do great.

    If I were relying on grocery coupons and restaurants to do it, I;d be about $600 worse off.

  11. Valerie says:

    I love Upromise! College will be difficult for us. We make decent money but my husband is a heart transplant recipient. So we get taxed like crazy but have a ton of medical bills. We also have to keep a substantial savings account for emergencies because not all of our medical expenses are doctor bills (travel, etc and once I lost my job because I was taking care of him…got a new job now). Upromise is easy and, while it is not enough to put my daughter through college, it will be enough to submit her applications, travel to visit schools, etc. We will have to rely on student loans and scholarships for the rest.

Leave a Reply

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>