inKind - a New Way To Provide Restaurant Capital, Dining Discounts

[lotus125]

Apologies if this isn't the board for this question, but I didn't see another good fit, and I'm particularly interested in thoughts from people in the DC-area restaurant industry.  There's a now-common service/app/restaurant funding company called inKind.  Basically (I think), the company fronts cash to restaurants and then sells restaurant credit, often at a discount (the more credit you buy, the greater the discount).  When diners eat at participating restaurants, they pay the bill through the app; the tip (or service charge) goes on the diner's credit card while the rest off the bill comes out of inKind credit.  Since many DC (and I assume other) restaurants participate, I assume that restaurants like the funding model to get upfront cash and that it may drive traffic.  But how do restaurants experience a diner's use of the app?  Is it good to pay down the credit?  Or does it deprive the restaurant of cashflow, i.e., a large check takes credit off the books but doesn't directly put money into the bank account?  If people with inKind accounts want to be considerate to restaurants, should they use inKind sometimes but just pay by credit card other times?  Or does it not matter?  I'm hoping that some of the industry folks who post here might have thoughts.  Thanks! 

[lotus125]

Just bumping this up as the board has gotten a little bit more active.  I'm still not sure how to think about using inKind credit. 

[will_5198]

Not an industry member (or currently in DC), but I was curious enough to buy an inKind gift card ($100 for $60) and plan on using it this month. I'm assuming a participating business finds the trade-off acceptable, or they are using the program as a trial run to see if it has a net benefit. The restaurant group I am using inKind at just opened a new location, so maybe it helped raise quick capital? I doubt enough to fund a whole build-out, but maybe to help push things over the finish line after inevitable issues arose and without going back to the bank. 

I'm just speculating, though. I would also be interested to hear from actual small businesses that use inKind.

[zgast]

Really interesting discussion - it does appear to be a bank loan that's essentially paid off through diners eating at a loss to the restaurant.  Here are a few case studies.  Jose Andres' restaurant group participates, so I'm guessing that breakage, driving customers to your location, and comparative interest rates on bank loans make it worthwhile.

[DonRocks]

I really, *really* want to hear from restaurant management that uses the inKind program.

When Groupon came out, I was so excited about it, but then after using it for awhile, I felt like restaurants gave me the evil eye when I used it. It’s a very similar model to the “Entertainment Book,” if anyone is old enough to remember that.

So, should I use inKind, or will restaurants make me feel like a cheapskate if I do? And what happens to my money if inKind files bankruptcy? Admittedly these are harsh questions, but I’ve never seen a “non-invisible program” that doesn’t make me uncomfortable (Chase Sapphire Reserve is an example of an “invisible program” because the restaurant isn’t even aware of the perks diners receive on the back end).

[zgast]

1 hour ago, DonRocks said:

I really, *really* want to hear from restaurant management that uses the inKind program.

When Groupon came out, I was so excited about it, but then after using it for awhile, I felt like restaurants gave me the evil eye when I used it. It’s a very similar model to the “Entertainment Book,” if anyone is old enough to remember that.

So, should I use inKind, or will restaurants make me feel like a cheapskate if I do? And what happens to my money if inKind files bankruptcy? Admittedly these are harsh questions, but I’ve never seen a “non-invisible program” that doesn’t make me uncomfortable (Chase Sapphire Reserve is an example of an “invisible program” because the restaurant isn’t even aware of the perks diners receive on the back end).

I would definitely love to hear from restaurant owners as well - but what's clear to me is that money flows to the restaurant upfront, so I think the risk for you is that either the restaurant or Inkind go out of business, not just the former.  Sort of a double whammy of risk.  The restaurant's incentive is for as much of this credit to go unused as possible.

[naxos]

Cause/Amazonia participates

[The Doctor]

Sadly, Causa and Amazonia left InKind some time ago. But there have been some great new additions.

Honestly, with increasing restaurant prices (along with the general cost of living), InKind has kept me dining out at the same pace as before, and even makes me favor participating restaurants. So I've dined at those way more often than I would have if InKind didn't exist. I'm hoping that's in the calculus for restaurants as well.

There are many ways to save even more by using InKind. As will_5198 aluded above, Costco has $100 gift cards for $70 regularly, and often $60 on sale. And sometimes the restaurants' websites themselves will have a pop-up offering a discount. I was actually able to afford Minibar thanks solely to InKind.

You only use the app when you pay the check, so I've never felt anything weird from restaurants when using it. In fact, when I was trying to reach a $150 tab for a $50-off-$150 deal at one respected establishment, the server knew what we were doing and even encouraged it; it certainly increased his tip (also paid via the app). But that was just one instance, and he may not have been conveying the sentiments of the owners.

I'd also draw people's attention to the Seated and Upside apps. Those give you cash back by submitting receipts from participating restaurants. (And gas stations as well in the case of Upside.) There are some restaurants where you can double dip with InKind and Seated, or Seated and Upside. (But I don't think a triple-dip is possible because Upside requires a receipt that was paid with a credit card.)

[Ericandblueboy]

The problem with Groupon is people get used to it and the restaurant can't stop participating or they'll lose the customers.  Eventually most of the customers are using Groupons so the restaurants either have to raise prices or cut quality.  I'm leery of the discounted  food model.