Gift cardholders who want to sell their unused gift cards have, so far, very little recourse. But now, using a cool new Facebook app, gift cardholders can sell those cards on the open market — and potentially revolutionize the gift card market in the process.
The application, called the Social Gift Card Exchange, comes from CardHub.com. In essence, it allows a venue for gift cardholders to sell (or trade) their gift cards to their friends, family and co-workers on Facebook.
Odysseas Papadimitriou, CEO and founder of CardHub.com, calls the exchange “a hybrid of Amazon.com and Craigslist for gift cards.”
No question the Cardhub exchange is an interesting idea. The Tower Group reports that, of the estimated $87 billion worth of gift cards in the U.S. marketplace today, roughly $5 billion — about 6% — are categorized by Tower as “unused and expired” gift cards.
So the demand is obviously there, but how does the technology work? The Social Gift Card Exchange is built on twin pillars — cutting out the middleman and instilling trust in the gift card exchange process.
The Craigslist angle comes from the exchange’s platform, which allows gift cardholders to list and sell their cards to buyers with no fees attached. It departs from the script somewhat as CardHub also lists itself as a potential buyer of the gift cards.
The gift card exchange also allows cardholders to “trade up” from a less desirable card to a more desirable card. CardHub’s Web site gives a good example of how this works:
“This is particularly true if a user wants to trade a gift card to a very popular store, like Apple, to a slightly less popular store, like Banana Republic (Stock Quote: GPS). For example, if someone has an Apple (Stock Quote: AAPL) gift card worth $100, they’re likely to sell it for close to $90 because of Apple’s popularity. Then the same person can use the $90 to purchase a Banana Republic gift card worth $110. In essence, they’ve gone from having an unwanted $100 gift card to a gift card worth $110 at one of their favorite stores.”
The deals seem pretty good for buyers, too. A glance at the CardHub gift card exchange site shows the following deals:
Gift Card Card Amount You Pay You Save
Barnes and Noble $200 $115 $85
Mohegan Sun $150 $100 $50
Crate and Barrel $150 $125 $25
Once you identify a deal you’d like to pursue, just click on the seller’s image box and that takes you right to a Facebook page, where you can send a message indicating your interest in buying the card.
To be honest, many of the gift cards listed on the CardHub site didn’t offer that much of a discount. A $100 iTunes giftcard that sells for $85 isn’t exactly a steal, but then again, everyone has their own opinion of what constitutes a deal.
To see for yourself, visit the CardHub Web site and kick some tires. But if you like a deal, and you’re a Facebook user, then the Social Gift Card Exchange could be a big “like” for you.
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