Interesting Development on Gift Card Reselling

Blackhawk Network announced in a recent press release that they’ll soon allow gift card exchanges through their GoWallet app.

Blackhawk and Gift Cards

Before we go into more details, let’s clarify who Blackhawk is:

• Blackhawk owns GiftCardMall.
• Blackhawk owns Cardpool, a leading gift card reseller.
• Blackhawk owns GoWallet, a gift card tracking website which allows you to track the balances of certain gift cards.

Blackhawk is now starting to offer gift card exchanges through the newly enhanced GoWallet app. Users will enter the gift card information in the app and get a quote of how much they’ll be paid. The user can then decide to accept the offer, and they’ll be paid in the form of a GiftCardMall e-gift card. The e-gift card can then be used to buy your preferred gift card from GiftCardMall.

Currently the app is available for iOS, with support for Android expected to come soon.

Another feature which will be rolled out soon is that we’ll be able to quickly scan gift cards into the app, without the need to input the numbers into the system. The smartphone’s camera will be able to recognize the gift card info and submit it through the app. This really sound like it could become an incredibly easy process. Not only will the gift cards be submitted electronically without having to ship them in, you won’t even need to enter the numbers into the system.

Payment

Currently, the payout is in the form of a GiftCardMall e-gift card which can be used to buy a different gift card on their site. They do mention that “more cash-out options will be coming soon”, presumably an ordinary cash payout.

It’s important to remember that GiftCardMall sells Visa giftcards, with a small processing fee (see this post for details on how to minimize those fees). If we’ll assume that the GCM e-gift card can be used to purchase Visa gift cards – a fair assumption – then even under the current system it would be easy to cash out, effectively making it more of a ‘sale’ than an “exchange”.

As mentioned, the gift cards are submitted electronically in the GoWallet app. We’ve discussed before that electronically submitted gift cards are usually harder to liquidate at a competitive rate. If GoWallet will offer competitive rates for this ‘exchange’, this could become a real bonanza in which we’d be able to sell off gift cards electronically for a good payout. We’ll have to wait and see how this develops.

The big question remains: what kind of payout will they offer? I haven’t tried it out yet and I don’t know if it’s in operation yet and what the payout rates are.

Cardpool

Another interesting thing here is the fact that Blackhawk already owns Cardpool, a gift card resellers marketplace. I’d even guess that the gift cards sold on the GoWallet app will be resold by Cardpool, since GiftCardMall does not currently sell second-hand gift cards.

Sounds like this is a move to expand their secondary gift card by having GiftCardMall/GoWallet users be part of it. This is exactly the opposite of what GiftCards.com  is in the process of doing – starting a separate used-card marketplace from their new-card marketplace, see Giftcards.com Branches Off to Saveya.com.

We’ll have to wait and see more how this develops and whether it becomes a serious option to consider for reselling gift cards.

HT: pymnts.com