Blackhawk Network is suing Moocho Inc. (a Delaware corporation with HQ in Miami Beach, FL) over a $65 million secured promissory note and for breach of contract. Blackhawk claims Moocho defaulted on required interest payments, admitted it was winding down operations, and now owes $67M+ in loan principal, interest, taxes, and attorneys’ fees.
The loan carried 8% interest for the first 12 months, and 10% thereafter. Moocho pledged its business assets under a security agreement.
Moocho responded that it was winding down operations and had $15M in senior secured debt ahead of Blackhawk.
Thanks to our friend Nick from Frequentmiler for flagging this. You can read the whole court filing at this PDF link.
The Churning Angle
For those of you who were living under a rock, Moocho’s gift card app Pepper Rewards was all the rage in 2024. For months, they offered double-digit rebates on top brands — often 10% back on Amazon or Walmart gift cards, stacked on top of your regular credit card rewards.
Similar deals in the past were risky, but Pepper was different: you got the card instantly, and worst case you still had credit card protections. That combination made it relatively safe for churners to go big.
What shocked us most was how long it lasted. It started in January 2024 and continued until Pepper’s “temporary downtime” in April 2025. And for many months along the way the deals just kept improving.
Behind the scenes, heavy-volume users were given a special portal with separate rates, much higher than the public rates available to regular users.
That model might make sense for a fast-scaling company (lose money to acquire millions of users, like Uber). But pushing ever-bigger discounts to a tiny group of power users? Hard to see how that was sustainable – there was no real customer growth, just volume growth.
The whole Pepper saga was fascinating.
One final note: the Pepper app is still live, and your account history and stored gift cards are still visible. You might want to download copies of your transactions and gift cards now in case the app goes defunct.
