Earn Crypto While Shopping with Lolli, Others

If you’re crypto-curious rather than crypto-committed, a loyalty program or credit-card linked program can let you buy Bitcoin, other currencies a little at a time.

Lolli logo
(Image credit: Courtesy Lolli)

If you think cryptocurrencies are a good long-term investment, a rewards program like Lolli or a cash back credit card that allows you to earn crypto while spending dollars can let you ease your way into the crypto market. But even though you’re not jumping full on into cryptocurrency this way, it’s still important to keep in mind the additional risk and volatility involved.

Crypto Rewards Programs 

Lolli (opens in new tab) allows shoppers to earn up to 30% in Bitcoin rewards when they shop online at one of their partner merchants, including Ulta, Nike, Chewy, eBay, Sephora and Staples. Lolli also allows users to link a card with the Lolli app to earn back up to 10% in Bitcoin for in-store purchase at select merchants, such as American Eagle, CVS and Shake Shack. RewardsBunny (opens in new tab) allows customers to shop online through their platform and earn crypto for every dollar spent. The company has partnered with many major companies, including Booking.com and Walmart. Fold allows customers to earn up to 20% in Bitcoin rewards by offering gift cards that can be purchased from its website and redeemed at popular retailers.     

Credit Cards with Crypto Rewards Programs 

 Many companies also offer traditional credit cards that earn crypto rewards instead of cash, points or miles. Major cryptocurrency exchanges, including Crypto.com, BlockFi, Gemini and Coinbase (COIN) all offer debit and credit cards through which customers can earn rewards in cryptocurrency for spending dollars. These cards allow customers to earn cryptocurrency directly or reward points that can be redeemed for crypto. Most of these cards offer rewards of 1.5% or 2% on most purchases, while some offer higher rewards for certain types of purchases, such as dining or groceries.

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A few financial-technology companies also offer credit cards that allow users to earn crypto. SoFi offers a cash-back credit card that allows customers to earn rewards and turn them into crypto when deposited into a SoFi Crypto Account. Upgrade Inc. offers a credit card that earns a flat 1.5% back in Bitcoin. Venmo allows users of its credit card (opens in new tab) to buy crypto with the rewards earned with the card.  

Risks of Crypto Loyalty Programs 

 One of the biggest differences between crypto and regular loyalty points is the value of the rewards. Loyalty points have a fixed redemption value set by the program, whereas the value of crypto rewards fluctuates with the value of that digital token at any given time. For instance, a credit card that offers 2% cash back means that you can receive $20 statement credit for a $1000 purchase. A credit card (or crypto rewards program) that offers 2% back in Bitcoin means you will receive $20 worth of it. Twenty dollars could’ve bought you 0.00029 BTC on Nov. 8, 2021 and 0.0011 BTC on Nov. 8, 2022 – about 70% less because of the substantial drop in Bitcoin’s value over the past year.

Given the volatility of crypto, this is something very important to keep in mind as your actual payback may be much smaller (or bigger) when you finally choose to trade or spend the crypto you’ve earned.

Another thing to bear in mind is that crypto rewards may come with a tax bill. With regular credit-card rewards or any other reward programs, you don’t face any tax consequences for redeeming them. But if customers redeem cryptocurrency in any form, they may owe taxes to the IRS as the agency treats cryptocurrency as property so anytime a digital asset is sold it triggers a capital gain or loss. 

Rodrigo Sermeño
, The Kiplinger Letter

Rodrigo Sermeño covers the financial services, housing, small business, and cryptocurrency industries for The Kiplinger Letter. Before joining Kiplinger in 2014, he worked for several think tanks and non-profit organizations in Washington, D.C., including the New America Foundation, the Streit Council, and the Arca Foundation. Rodrigo graduated from George Mason University with a bachelor's degree in international affairs. He also holds a master's in public policy from George Mason University's Schar School of Policy and Government.