Toys R Us fans have one more chance to cash in on the iconic toy chain’s demise — and non-fans have one more chance to cash out.
Through Friday, April 6, customers with gift cards to the big box toy store can trade them in for gift cards to somewhere they’re more likely to shop, while those who hope to score some good deals at Toys R Us inventory liquidation sales can scoop up those unwanted gift cards at a discount.
The trade-in program is powered by CardCash, a marketplace similar to StubHub, where people can buy, sell and trade gift cards from various major retailers.
Toys R Us was a longtime partner of CardCash, according to CEO Elliott Bohm, but the platform stopped accepting gift cards from the toy chain after it announced its bankruptcy — it’s much harder and less profitable to move gift cards for a dying retailer, Bohm said.
However, Bed Bath & Beyond convinced the platform to accept Toys R Us cards for one more week, allowing customers who did not think they would have time to spend the money on those cards to convert them into store credit at either Bed Bath & Beyond or its subsidiary, buybuy BABY.
Bohm explained these two stores share a lot in common with Toys R Us, particularly the buybuy BABY brand, so the ability to trade in one store credit for another gives customers a chance to make similar purchases to those they might have made at Toys R Us, but in their own time.
Two-Sided Marketplace Value
Of course, sellers will take a hit on their gift cards. That would be true even if they wanted to sell gift cards from healthy retailers.
On average, a seller will collect $0.75 to $0.95 on the dollar when turning in a gift card, Bohm said — more when trading it for another gift card, less when cashing out and having the funds sent to a PayPal account, direct deposited into a bank account or mailed as a check.
Since Toys R Us isn’t a healthy retailer, sellers will take a much bigger hit, said Bohm, collecting only around $0.64 on the dollar for their gift cards. However, Bohm noted that this is still a gain for those sellers when one considers the alternatives.
Those customers could hold onto their cards in hopes of spending them, run out of time and watch the cards expire — or, they could make a trip to Toys R Us and spend the card just to avoid having it expire, in which case the customer has bought something he may not really want.
Bohm said either scenario is a 100 percent loss for the customer, whereas by selling or trading in the card on CardCash, the customer can still realize some value, as well as enjoy more time to spend the funds on something truly wanted.
As for buyers, it’s true they’ll only have until April 21 to spend the gift cards before all Toys R Us store credits become worthless, but Bohm said for customers buying at this stage, the short timeframe poses little issue.
Any shopper who would pick up a Toys R Us gift card this late in the game is likely doing so out of an immediate need, he said. Chances are, that person is already in the store and has a cart full of toys; checking the CardCash mobile app for a gift card that could knock even more off the ticket price — which could be delivered digitally before reaching the checkout — is just icing on the cake.
Bohm said CardCash is considering whether to extend the trade-in window, so customers who think they’ve missed it should check the site anyway; there could still be a chance to win big.
Waste Not, Want Not
Bohm said there are billions of dollars’ worth of gift cards going unused each year. While givers find gift cards to be more thoughtful than simply handing a loved one cash for Christmas, many recipients don’t like being constrained to a single store; they want the freedom to spend wherever they choose.
That’s why Mastercard, American Express and Visa gift cards are successful, Bohm said, but these general purpose cards come with activation or monthly fees, making them less desirable to the sender.
The CardCash business model helps consumers and brands cross that last mile between a store-specific gift card being issued and the same card being redeemed, ensuring that participants in the ecosystem are not only getting monetary value for their cards, but also true value as translated into a purchase.