For most people, gift cards are kind of like playing holiday/birthday roulette with loved ones. The inherent practicality in gift cards is that you can give friends or loved ones the ability to purchase whatever it is they want for themselves while avoiding the inherent crassness of handing them an envelope filled with cash.
That practicality, however, hinges on a gift card actually coming from a place that sells something that particular consumer could conceivably want.
“I would be a lot more excited to get a gift card to Tiffany’s than Home Depot,” MPD CEO Karen Webster noted in an interview with Cardpool General Manager Patrick Ramsey.
Because while Webster can think of many reasons she might want to buy jewelry, she has comparatively little need for potting soil or power tools, which means that the Home Depot card someone gave her will likely be forgotten in a drawer, with its best chance for use being a future re-gifting.
This is the problem that Cardpool specifically and Blackhawk (the company that acquired them in 2011) exist to solve. Because, as Ramsey explained, an unused gift card is a lost opportunity for a merchant.
“Customers will spend, on average, 30 to 45 percent over the value of the gift card,” Ramsey noted. “If you look at the history of Blackhawk and Cardpool, we have really made gift cards available both physically and digitally and we’ve also enabled consumers to really be able to easily store and redeem their gift cards with their mobile device. We have a long history of recognizing where consumer needs are, where opportunities are and then working with retailers to really make it easy and make sure that the right customers are getting the cards.”
And to expand on that vision, Cardpool has recently entered into a unique sort of partnership with Changefindr’s social giving platform that will allow gift card users to essentially donate the exchanged value of their card to the charity of their choice.
“We think it is a tremendous opportunity. As part of Blackhawk, our focus is on really, ‘How do we get the right gift cards into the right hand?’ This gives someone the ability to take a gift card they may not use [and have] the ability to get value out of that, not just get value but also the emotion satisfaction from donating to a nonprofit or a cause they care about.”
Ramsey went on to explain that nonprofits get a new funding channel, card donators get to feel good about themselves, card recipients get a card to a place they want to shop and merchants get a customer in the store (or on the site) who comes ready to buy.
And, it’s easy to use.
“We really solve for donors and customers in general. They can use a digital gift card or a physical gift card. They don’t have to mail those cards to us. They provide the information on the gift card, but they don’t have to mail the card physically,” Ramsey said.
And while Webster wondered if this increased the risk of fraud, with consumers “doing the right thing” and donating a card, and then turning right around and using it themselves, Ramsey said it is a risk that exists, but that they’ve accounted for.
“It allows us to take those gift cards they have exchanged and handed in, and get the right card into the hands of the right customer,” he said. “We spend a lot of time working with partners to understand how the donations and exchanges work, and we work closely to really verify information consumers provide to us. We have a lot of proprietary tech behind the scenes that allows us to make a well-educated decision about fraud so it hasn’t been much of a problem.”
Users can donate the entirety of a gift card to a 501c3, or they can choose to donate a remaining balance. Changefindr handles the donation of funds and, as long as it was more than $2, Changefindr also mails back a receipt so that the donation can be logged for tax purposes.
“Changefindr provides a win-win partnership between projects in need of funding and consumers looking for an alternative way to donate to charity,” said Ruchi Mitra, founder and CEO of Changefindr. “By partnering with Cardpool, we are able to provide nonprofits and other worthy causes additional sources of funding and thus help them focus on their primary effort of helping others.”
Gift cards have grown and Ramsey says they firmly expect them to continue to grow because of the wide variety of needs they can serve for both consumers and retailers.
As a result, Cardpool and Blackhawk have a clear mandate going forward, he said. They aim to keep finding ways to make it quicker, easier and more intuitive to use them in as many different ways as possible.