I have worked on a competing product called OneGratis ( http://www.onegratis.com ). It works in a similar fashion to Punchd, except I think we might have been out a little bit earlier and the end-user is not required to create an account.
Regarding the comments on cheating, I think one of the best ways to combat that, is to build in functionality to disable phones online. As users are forced to be online when they redeem their loyalty card, this also means they are forced to synchronize their app with the server.
This approach tolerates a little bit of cheating, but also makes sure we can lock out a user, if the stats indicate the person is cheating.
I have worked in the games industry all my life, and also had my own game company. I am starting to think the industry is seriously broken in it's current form.
The main reason is that it is such a hit driven industry, which means that most companies live from hit to hit, until the moment they have a failure. At that point, most companies close down, as they can't afford a new production and may not be lucky enough to get a publisher deal early on.
The problem is that it is hit driven industry, and this is true no matter if you make AAA games like Gears of War or Halo, or if you make small iphone games or middle-sized games on Steam or XBLA. The sales numbers drop sharply as you move away from the top selling games and it is extremely hard to stay in the top for very long.
Publishers are essentially the VCs of the games industry, and have enough money to spread their risk, as they know 80% of their projects will fail.
Another problem with game production, is that you don't really need that many people early on, when you are still figuring out what game you are making. Then slowly as you enter production, you ramp up the time. This is also the same reason, that so many people are often laid off after a game comes out. There is no longer a need for all those people in the company.
What I think really needs to happen, is for games companies to become more like movie production companies, where a team is assembled as needed and can be dispersed with no hard feelings after the production. The production of a game, also becomes a much more measured risk this way.
Regarding the comments on cheating, I think one of the best ways to combat that, is to build in functionality to disable phones online. As users are forced to be online when they redeem their loyalty card, this also means they are forced to synchronize their app with the server.
This approach tolerates a little bit of cheating, but also makes sure we can lock out a user, if the stats indicate the person is cheating.