Gift cards lost in the jungle?

by Bruce Kasanoff on August 14, 2011

For companies, gift cards are a way to both lock in customer loyalty and collect cash for items they may never have to ship. For consumers, they can represent a bad deal, or an inconvenience. The Tower Group reported that $5 billion in gift cards went unspent in 2009.

Plastic Jungle claims to be the leading gift card exchange, and they allow customers to sell or swap gift cards.

Denise Gabel of the Filene Research Institute, which studies the future of consumer finance and credit unions, says, “The ability to trade retail gift cards like cash and use them to make payments immediately disrupts the retailers, and the power suddenly shifts from them as the concept grows,” Gabel said. “No more float that these cards provide, and the up sales from the consumer using that gift card in the retail environment are gone.”

Cardpool and Gift Card Exchange offer similar services.

The moral of the story? It’s better to lock in loyalty by making a customer’s life easier, than harder.

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