The secondary gift card market gives rise to an entire ecosystem of unique platforms and apps

The secondary gift card market gives rise to an entire ecosystem of unique platforms and apps

The secondary gift card market gives rise to an entire ecosystem of unique platforms and apps

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The United States gift card market is expected to reach around US$188 billion in 2022 and is poised to grow at a CAGR of 8.3% to reach US$259 billion by 2026, as per PayNXT360 estimates. However, the maximum remains unused for these gift cards, and the number is as high as US$19 billion in the country. 

A survey conducted by PayNXT360 stated that more than half of Americans have one unused gift card. As compared to 2021, the unused amount rose by 5.8% in 2022. Many innovative startups are finding value in these unspent gift cards. For instance, 

  • In August 2022, a unique giving platform, CardFunder, came up with an innovative idea of a mobile app to convert new or partially used gift cards into cash. Initially, Cardfunder worked as a platform that enabled fundraisers to accept physical gift cards. This newly launched mobile app will help it expand and accelerate its business as donors can not only physically hand over gift cards but also donate digitally. This CardFunder mobile app, therefore, empowers fundraisers to collect billions of unwanted gift card balances simply through mobile phones. 

CardFunder mobile app is a revolutionary product for fundraisers. This app is designed such that the donors can also increase community groups' access to potential donations by accepting gift card donations from anywhere in the country, such as churches and schools. Additionally, non-profit fundraisers can also benefit from using the CardFunder mobile app. Furthermore, the platform also aims to cater to other non-profit organizations for youth sports and other community fundraising.

Notably, the platform accepts gift cards ranging from US$5 from around 2000 different regional and national brands. Cardfunder, specifically, utilizes secondary resellers and gift card marketplaces for donations, and the rate varies depending on the merchant and the marketplaces. Importantly, the platform, on average, returns between 60% and 85% of the card's remaining face value back to the charity within nearly two weeks. 

This unique platform, which has no upfront investment, is able to gamify the entire process of giving with ease. The fundraisers or the fundraising groups download the platform's toolkit and promote their event on their platform's social media sites. The groups, especially, can share the fundraiser link on Facebook, Instagram, and Twitter or by QR code, else donors can also search by a fundraiser's code or name to find it. Notably, these events become "purpose-driven" campaigns that yield terrific returns, with all parties feeling a sense of gratification in the process. CardFunder stated that one church group raised nearly US$20K in one weekend in the single largest non-traditional giving event ever for them. CardFunder's innovative platform also attracted innovative partnerships after its launch of the new mobile app. For instance, 

  • In August 2022, Mission1Race and CardFunder announced to enter into a partnership to enable online gift card donations through its new mobile app. Mission1Race, which is also a non-profit organization, will raise funds through online gift cards. Therefore, it is expected that digital fundraising through gift cards will expand the reach of a fundraiser across regions, allowing friends, family, and supporters to donate easily.

Due to the increasing number of unused gift cards around the globe, the gift card waste has piled up. Therefore, innovative platforms which are helping to utilize unused gift cards are seeing growth in business. For instance, 

  • India-based cashback and gift card B2C online platform, Zingoy saw an uptick for its easy and reliable cashback together with buying and selling of gift cards feature in December 2021. Apart from buying gift cards, the Zingoy platform also offers the sale of unused gift cards for its vast user base. The consumers can easily sell the unused gift card to another consumer who might be looking online for it. In order to resell the unused gift card, the consumer has to enlist the gift card under the correct store or brand and quote the desired price. Consequently, when someone shows any interest in the listed gift cards and purchases them, the money gets directly credited to the respective bank. This unique feature is expected to assist the platform in expanding its market share in the country.
  • Another platform named, Prepaid2Cash is an app that enables consumers to quickly and securely convert gift, and prepaid card amounts into cash raised a US$5.1 million Series A round in June 2021. The platform works with gift cards from many popular retail brands and also with Visa, MasterCard, American Express, and Discover branded prepaid debit cards. The cardholders can easily register and receive cash for unused cards. Apart from cash, this unused card amount can also be transferred to Bitcoin payment which directly transfers to their bank account or even to a crypto wallet within minutes.

Prepaid2Cash prioritizes providing immediate customer service and extraordinary security, as the team understands that the market underlying gift card sales may not be familiar to some users. This service is expected to help it become one of the market's key technology providers for gift and prepaid card redemption. Interestingly, Prepaid2Cash educates consumers about the gift card industry and how they can participate in it to their advantage. It also informs its blog readers about store cards currently in demand, recommends creative ways to use gift cards, and analyzes industry trends.

Notably, this platform saw strong revenue and user adoption growth, reaching 300%+ year-over-year growth. Lastly, the fresh capital is aimed by Prepaid2Cash to expand its business through customer acquisition and bring further enhancement of its financial technology and features. Apart from these platforms, other websites, such as CardCash, Raise, and GiftCash, allow consumers to sell unused cards and receive 70% - 90% of the value in cash. 

To know more and gain a deeper understanding of the gift card market in the United States, click here.

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