CHICAGO (CBS) — A Chicago tech company that promised consumers cash back for frequenting approximately 200 restaurants and other businesses suddenly shut down operations in late June, with little warning to anyone.
Spring Rewards allowed tens of thousands of users to register their credit card or debit card on its website, and when people used those cards at businesses in the company’s network, they would earn cash back when hitting certain spending thresholds.
On June 21, Spring emailed tens of thousands of customers, notifying them it was discontinuing operations, and users would have only six days to redeem any remaining rewards before the program ended.
A spokesperson said “we have been going through a very thoughtful and deliberate process for many months,” but the announcement took many businesses who hired them by surprise.
Sopraffina Marketcaffe apologized to its loyal customers after learning of Spring’s shutdown, saying it was sorry for the “embarrassing and regretful situation,” adding Spring didn’t provide enough notice for the restaurant chain to set up a seamless new rewards program.
“We felt like it was important to be open and honest,” said Taryn Kelly, vice president of marketing for The Rosenthal Group, which owns and operates Sopraffina, Poag Mahones, and Trattoria No. 10.
The loyalty program offered by Spring was a way for Sopraffina and some 200 other businesses to thank loyal customers for repeat business.
“We have customers that come to our restaurants two, three, sometimes four times a week; and having a loyalty program is our way of being able to communicate with those customers and giving them rewards for their business,” Kelly said.
Spring’s other clients also were taken by surprise, including Sweetwater Tavern and Grille, part of the Bottleneck Management restaurant group.
Sweetwater sent an email to customers apologizing for the sudden end to the rewards program, and providing a $10 discount, acknowledging the end of the loyalty program was “frustrating,” a “hassle,” and on “short notice.”
That short notice didn’t sit right with Kelly either.
“I found out via email about a week ago. Sitting at my desk, got an email that said we made the unfortunate decision to end our rewards program effective one week from now,” she said. “I understand that businesses need to shut down immediately for a lot of reasons, but it was just unfortunate to hear it that way, and that it was happening so quickly.”
Calls to Spring reached only a busy signal, and when CBS 2 visited the River North offices listed on customer emails as recently as June, all that was there was an empty space.
Spring said it moved to another location months ago, and was in the process of updating its address.
Spring also said no customer information is at risk due to the shutdown. The company said it did not store credit or debit card information, but instead used encrypted tokens as stand-ins for card numbers.
“We would suggest that there is nothing newsworthy related to the company, but instead merely a disappointing but mundane set of commercial events,” a spokesperson stated in an email.
However, an internet search revealed Spring’s certificate to conduct business in Illinois was revoked two years ago.
In 2017, the Illinois Secretary of State revoked its authority to do business in the state, for failing to file required annual reports and to pay annual franchise taxes.
Spring apparently ignored the repeated notices, telling CBS 2 “we have not had anything revoked by any governmental agency.”
The company called the matter “an administrative oversight going back to 2016.”
The Secretary of State’s office disagreed, countering “they will be hearing from us shortly.”
The state plans to pursue back taxes, penalties, and interest.