Comments on: Gift Card Secondary Market

By: Chris Chingle

Chris Chingle — Thu, 14 Feb 2008 18:34:31 +0000

ooops.

http://www.giftcardbuyback.com

By: Chris Chingle

Chris Chingle — Thu, 14 Feb 2008 18:33:46 +0000

Greb B.

To your “thoughts”…

1) Wow, you couldn’t be more wrong. See website listed above.

2) Retailers are mildly curious. Other than that, they couldn’t care less.

3) Values are easy to verify. Yes, fraud is out there. Name a business where there isn’t the potential for fraud.

By: Humphrey Bogus

Humphrey Bogus — Wed, 16 Jan 2008 10:46:22 +0000

http://www.nytimes.com/2005/12/17/business/yourmoney/17gift.html?_r=1&pagewanted=all

By: Gordon

Gordon — Mon, 14 Jan 2008 22:33:31 +0000

If you spend some time on craigslist, (in SF area anyway) you’ll see and activish market for gift cards. Especially in the barter section. I’ve always been a little baffled by it. Isn’t it easier to get to Home Depot and find something you want, than to bother with trading the card? I guess not for all these people with listings up.

By: Jeff

Jeff — Mon, 14 Jan 2008 16:02:29 +0000

Jackie,
Body Shop ethos are what kills it for me… I actually have become more attuned to skin care as I get older. I like these products, http://www.labseries.com/

What say you? Good stuff?

Greg / Geoffrey,
Side stepping the size of the liquid market and seller incentives, I’m curious to know your thoughts on whether such a marketplace would work if it were a clearinghouse for cards which the vendors were buying back. Sure they count on a large number going unredeemed but if they could take an even bigger number off the table at a discount rather than at face value, would there be value in it for them.

The one kink in that idea is that the face value isn’t what the economic value is to the merchant because they have to factor in cost of goods. For example a $100 card that is redeemed for $100 of merchandise with 20% gross margin isn’t really worth $100 to the merchant.

By: Jackie Danicki

Jackie Danicki — Mon, 14 Jan 2008 07:30:27 +0000

Jeff, I am no fan of the Body Shop’s ethos or late founder, but I think you’d like their range of body butters. Perfect for the man who has it all!

(I’m still reeling from the news tonight that my father moisturizes his face. I socked him one of the many freebies I get for my beauty blog, but not without a tinge of regret.)

By: Geoffrey

Geoffrey — Mon, 14 Jan 2008 07:07:56 +0000

Call me crazy, but I think that 7.8 billion dollars worth of gift cards $50-$100 at a time is enough of a market for such a service. Fraud may be a problem, but it may not be, especially since it’s easy to verify the value of a gift card these days since it’s all electronic. Also, consider how much more seller friendly it would be for someone to sell a gift card to a retailer rather than creating an ebay auction. Snail mail may be inconvenient, but if it is set up in a similar way to netflix with the mass mailing and the self addressed and paid envelopes it could be pretty seller friendly. Also, with so much online shopping through the most popular gift card stores, what’s to say that the company couldn’t display the card number for the purchaser on its site after purchase and maybe even put some kind of 3rd party pay per click service (maybe google ads) that will link the customer right to the website of the store that they just purchased a gift card for. It’s not perfect, but it seems possible with a little work, at least in my head.

By: Greg B

Greg B — Mon, 14 Jan 2008 05:27:26 +0000

A few thoughts…..

1) Not enough mass-market “seller incentive” to go thru the process of selling or trading gift cards for a few dollars worth of value creation. Sort of like why there isnt a huge market for trading coupons or “gift checks” like for diapers and baby formula.

2) The retailers want nothing to do with it, thus not being able to verify values or enable electronic tranfering take any marketplace economics. Take a look at eBay, you will see $100 Best Buy gift cards trading for about $90. When you assume the seller pays $3.00 in fees to sell and about the same to handle payment, th seller is only getting about $.80 on the dollar (plus opportunity cost to list, manage listings and fulfill via snail mail). On top of that, the buy pays a shipping fee, which dilutes the razor thin value of the transaction to begin with.

3) Fraud, in its offline, non-verified way, if a meaningful market did exist, the fraudsters would crush it as there is more then enough “empty” gift cards which could be protrayed as of value.

By: Geoffrey

Geoffrey — Mon, 14 Jan 2008 04:57:46 +0000

I’ve always thought to myself that it would be a great idea to start up a website devoted to buying and selling gift cards in a slightly different way, although there are definitely issues with my idea that need to be thought about and played with.
Rather than having an auction site and charging a flat rate for posting the gift card to be auctioned, I think it would be an interesting idea to create a site that buys and sells gift cards at a discount rate. For example, the company could buy a gift card from a person for 85% of face value and then resell it on the site for 90% of face value. These numbers might have to be played with in an attempt to balance out the supply with the demand, and as traffic to the website increases profit margins on each card can be slimmed, but I do believe there should be a way to pull this off. I can’t count the number of times that I’ve gotten an iTunes gift card for example and wished that there was someone I could sell it to even at a discounted rate since I have no interest in purchasing music through iTunes. And how cool would it be if one could go to a website to purchase discounted gift cards, particularly for larger purchases where the savings could be very significant? If I want to buy a $5000 home theater from best buy, wouldn’t it be great if there was a place that I could go to buy $5000 worth of gift certificates for $4500 and get savings that can be combined with any in store discounts being offered at the time? One can dream.