Not sure what to do with that gift card? Now, you can sell it
Like many people, Alyssa Loring had gift cards socked away that she’d never use. The Woburn resident doesn’t shop that much at Urban Outfitters or Tiffany anymore, meaning the gift cards she found while cleaning out her office last month — worth nearly $200 — would have just continued collecting dust.
Then, on a whim, she searched Google for “sell my gift card.”
With a few clicks, Loring swapped the gift cards she’d never use for a digital gift certificate for Amazon.com, a site she uses constantly. She said she got around 80 percent of the remaining value on her gift cards back.
“For something that’s just sitting in the drawer that I’m never going to use, it was easy,” Loring said.
Around this time of year, Loring is not alone. The used gift card market is busy, with thousands of people flipping cards they’ll never use in exchange for cash or other gift cards they’re more likely to use, according to Luke Knowles, who runs the website Gift Card Granny from Fort Collins, Colo. Big names, including Walmart, are also getting involved in an industry that was formerly limited to people hawking cards on eBay.
“December and January are gift card months,” said Knowles, whose site currently displays more than 100,000 gift cards for sale. Although Gift Card Granny doesn’t directly buy and sell gift cards, Knowles estimates his site is patched into other websites that control 90 to 95 percent of the gift card reselling market. He figures people buy at least $500 million worth of secondhand gift cards per year, with sales volume doubling every year.
Granted, that’s a small share of the gift card market, which the consulting company CEB pegged at $124 billion last year. But the secondary market’s rapid growth explains why some big players are getting involved. In the past two years, CoinStar, whose machines convert coins to dollar bills at grocery stores around the country, has added 700 machines that pay cash for gift cards.
Shortly before Christmas, Walmart partnered with a secondhand gift card website to give people digital Walmart gift certificates worth up to 97 percent of gift cards from some 200 other stores. The company wouldn’t say how many people took advantage of the offer, which ended in late January. Just last month, a gift card resale startup, Raise, was valued at nearly $1 billion by investors.
Christmas is a particularly busy time for the gift card market. According to Google Trends, which tracks what people search for around the world, searches for the phrase “sell gift card” have peaked every December for the past four years. And for the past several weeks, the daily volume of cards available on Gift Card Granny has been 10 times its usual volume.
Still, the cards get snapped up almost as quickly as they come in. Discounts for buyers range from almost nothing for Amazon gift cards to as much as 40 percent off iTunes gift cards. Some people will buy in bulk, said Knowles, like a contractor who might purchase $2,000 of Home Depot gift cards per week to save on business expenses.
The business model is pretty simple. Websites such as ABC Gift Cards, Cardpool, and Card Cash make their dollar by playing the middleman, buying low — say 80 percent of a gift card’s value — and selling just a little bit higher, maybe 87 percent.
There’s also a certain rhythm to the market, said Tomás Campos, the head of digital emerging businesses at Blackhawk Network, the publicly traded company that owns Cardpool. People flock to buy gift cards between September and November, he said, and rush to sell them back after Christmas. The discounts customers can get follow that same pattern: When supplies rise after Christmas, discounts tend to be better.
“It’s very much like the stock market,” Campos said.