Gift card marketplace grows for retailers
November 14, 2014

Stores should be looking at gift card programs not as a simple bonus, but as a way to boost sales both inside and outside the store. If a retailer is able to place its gift cards at kiosks near the store, it can present an opportunity to bring customers to the store without having to directly market to them. That can be a very useful tool in developing loyal customers that come back for more. In addition, some companies have the ability to give customers gift cards for the stores they want to visit in exchange for the gift cards they don't. Retailers should be able to accept gift card payments and join these programs, so that loyal customers are able to come back for more.

One company in particular has stood in this respect. Raise.com is a marketplace exchange that allows consumers to sell their gift cards for a specific price, according to GigaOM. In return, another person can buy that gift card for the price sold. So, if a customer has a prepaid gift card for a restaurant that they don't want, they can sell it at slightly less than the total value in exchange for cash. The card doesn't lose any value, while the retailer keeps the amount of money made from the original transaction. A customer that's interested in the restaurant can purchase the gift card at a reduced rate and have a meal to try out the place. If they like it, they'll likely come back to the place without the gift card as a loyal customer. The retailer eventually starts earning sales from people who actually want to visit the store, but were initially too afraid or otherwise unable to try it out.

It's all in what you raise
Raise.com presents an interesting alternative for gift card receivers. It recently received $18.1 million in venture capital from Bessemer Venture Partners, a firm that previously invested in big startups such as Pinterest. It also demonstrates the potential of gift cards being a useful payment method for retailers. Instead of worrying about customers that will never come to visit the store from where they received the card, retailers will take advantage of the fact that gift card holders who come to visit are legitimately interested customers. This reduces the amount of unused gift cards overall. A savvy retailer with an integrated payments system could stand to benefit from this by installing gift card software and instigating a program that rewards people for using gift card payments.

Nexus: G-WEBCD1