Yelp Targets FourSquare With Merchant Check-In Rewards

San Francisco local ratings giant Yelp rolled out a new offering last week that allows merchants to provide rewards or discounts to Yelp users who check in at stores or restaurants. This move has been long anticipated as Yelp battles FourSquare, which has been offering similar capabilities to merchants for some time. To date, FourSquare has been the leader in these types of mobile commerce offerings based on check-in conditions.

So why would Yelp get involved in this area? Because Yelp's venue coverage is the most comprehensive in the local ratings industry and it already has an extremely active user base at least as large, if not larger, than that of FourSquare. What's more, with both services now offering the same ability to offer instant discount to frequent buyers, it will be easier for merchants to compare head-to-head which system is performing better. As check-in fatigue begins to become a problem and consumers fix on using one network for check-ins, then this becomes more of a winner-take-all proposition.

It will be a tough battle. FourSquare continues to grow its user base quickly (it's at 4.5 million now) and merchant awareness of its offerings continue to increase. In the Bay Area and New York, in particular, FourSquare merchant deals abound, so Yelp has some work to do to catch up to FourSquare in terms of getting merchants to log on to this feature. Then again, Yelp has the local sales force in place that can quickly bring merchant customers up to speed on the offering and entice them to put up offers that improve on FourSquare offerings. Regardless, the check-in battle is heating up and this holiday season should see a furious pace of check-in offers for high-value and high-frequency shoppers on any and all social network platforms including FourSquare, Facebook, and Yelp.