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PantryPerks’ referral program makes free groceries possible

A new online grocery retailer harnesses the power of word-of-mouth and offers cash back for customers' and their friends' purchases.

A new online retailer offers natural, organic and specialty name-brand food for a flat delivery fee and no membership charges—and a chance to earn free groceries.

PantryPerks, founded by Rishi Padhi in Sunnyvale, California, gives customers who spend at least $60 per month 7 percent back on those purchases. When a customer’s friends spend at least $60 a month, the original customer earns 6 percent from those purchases, too. And when friends of friends also spend at least $60 per month, the original customer receives 5 percent of that.

Customers can receive their payments via PayPal, bank transfers or PantryPerks credits, Padhi wrote in an email to New Hope. 

“We enable this by not spending on marketing and instead, giving it back to consumers for their word-of-mouth reference,” he wrote. PantryPerks also gives 1 percent of each sale to a nonprofit of the customer’s choice or, if the customer chooses, 6 percent of a sale to the Non-GMO Project, according to the company’s website.

“We use technology, a lean supply chain and social commerce to challenge traditional retail margins structures, and re-distribute the same back to consumers and causes,” Padhi wrote.

The company says it is not a multi-level marketing company, because consumers are not required to purchase and re-sell inventory and no one is compensated for recruiting associates. Instead, PantryPerks uses a “triple-reward loyalty cashback program” or “multi-level social commerce,” Padhi wrote.

Padhi is the sole founder of PantryPerks, which opened in September as a for-profit, online-only business. His experience includes nearly 17 years in consumer packaged goods, consulting and e-commerce (including eBay). He is, he wrote, in discussions with bringing in partners or investors.

Because he is in discussions with potential funders, he would not say how much the average customer is spending or how many unique customers the business has had so far.

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