Online outlet store Overstock.com is to launch a special rewards program that will give bitcoin buyers 1% back in the form of Club O dollars, the company’s in-house rewards points.
Speaking to CoinDesk, Overstock CEO Patrick Byrne said the scheme is expected to debut in approximately four weeks, although he did not commit to a definitive timeline.
The program will not provide an instant discount on orders, but will instead give 1% of the total purchase value back to buyers to be applied to future purchases. Byrne did not provide further details of how the program would work, or whether it will be able to be used in conjunction with other company rewards schemes.
The announcement comes as Overstock nears a total of $1m in sales paid for in bitcoin. Overstock began accepting bitcoin on 9th January – garnering $130,000 in total first-day spending.
Byrne declined to provide hard figures for Overstock’s current sales total, citing legal reasons, but did estimate that it will likely pass the $1m mark by this weekend at its current bitcoin sales rate.
Byrne said he continues to be surprised by number of purchases bitcoin users are making on the site. He indicated that bitcoin buyers are 80-85% male, whereas the average customer base generally is 60% female. The figures suggest bitcoin has opened up a new audience for the company.
Addressing the findings, Byrne said:
“We expected a move to computers, electronics and the kinds of things that the geeks who know about bitcoin would be likely to come and buy. Turns out there’s been very little shift like that.”
Instead, the top purchases via bitcoin to date have been furniture, desks and clothing – items that are not as accessible to bitcoin users through other merchants.
Tax showdown looms
Overstock’s recent decision to keep some bitcoin on its balance sheets could also find the company playing the role of newsmaker once again. Byrne suggested that should Overstock be holding bitcoins at the time of its upcoming first-quarter fiscal reporting, it will likely be required to report this action to the tax authorities.
“That’s an issue that the sec and the accounting wizards have not opined yet, so we could be the test case.”
Byrne indicated that he has already been contacted by several outside accounting firms that have voiced an interest in being part of this process. The agencies, he said, are interested in participating because it could set a precedent for how publicly traded bitcoin merchants will need to disclose such holdings.
In regards to his own personal bitcoin holdings in light of recent price volatility, Byrne said he remains unconcerned.
Citing the work of John Maynard Keynes, he spoke at length about the gap that exists between total wealth and the amount “sucked out of society by the financial system”. Bitcoin, he said, is a hedge against this gap.
“For me, bitcoin is what I want to have if the zombies walk the earth ... I don't really care about day-to-day fluctuations at all.”
On his recent fourth quarter company conference call, Byrne revealed that he invested “several million dollars” into bitcoin, an amount he now says is 1% of his net worth.
Image credit: Overstock.com