LBS is no different than Social Media. It covers a wide array of technologies thus confusing everyone except the people who might make money off the confusion. Different Businesses and Platforms have different goals.
L is for Location:
Do we need a Satellite Linkup? Yes and No.
Yes if you want to be found. I use FourSquare, Gowalla, and Yelp! when in an unknown place to see what is around. What restaurants and stores are nearby.
But does a store I am going to visit need a satellite to engage with me? No. I can do that via my mobile device in person via 3G 4G or whatever G network I am using with a simple scan of QR code placed inside the store. This will prove no fake check ins. Even better instead of looking for a deal and blowing you off maybe I come in don't see a deal yet see something and buy it.
The problem with the Satellite is immense. Doesn't work indoors most of the time so if I am at the mall I have to go back outside to check in if I see a store I am curious if they have a deal. Doesn't work in the Upper East Side of NYC because of the tall buildings. It allows false check ins.
B is for Buying:
The goal is to get me to buy something correct? I was up in Vermont last week and checked Foursquare and saw some deals but none that was enough for me to come in and try a restaurant. To get a half price small plate isn't enough. But it's great if I am going anyway and know I can get that. But does that help or hurt your margins?
For a Store whether it is piggy backed on a Service like Gowalla or Shop Kick or a Proprietary App if I had a unique customer identifier that knows it is me with full purchase history would that create the basis for the most robust margin building, revenue growing platform ever? You can pull up the Chief Alien's history and custom craft the hooks possible to maximize a sale, move older inventory, or customize my experience just like if I had my own personal shopping minion.
S is for Social:
Does Location Based Services need a Social Element?
But if people want to share you better sure enable that activity. I myself am sharing my check ins less and less with Twitter. I surely won't be sharing purchases etc. I definitely will never check in to a Place on Facebook. But that is me. If you want to go ahead. It benefits the Store or Business you are patronizing. Maybe there should be an added incentive to share kind of like what Lockerz is trying to do.
For a Customer to Store connection if I check in and share with Twitter I get 1% off. If I share my purchase activity on Facebook I get another 1% off. If it takes place on a larger platform maybe I can accumulate points for a reward down the road.