Gift cardholders who want to sell their unused gift cards have, so far, very little recourse. But now, using a cool new Facebook app, gift cardholders can sell those cards on the open market — and potentially revolutionize the gift card market in the process.
The application, called the Social Gift Card Exchange, comes from CardHub.com. In essence, it allows a venue for gift cardholders to sell (or trade) their gift cards to their friends, family and co-workers on Facebook.
Odysseas Papadimitriou, CEO and founder of CardHub.com, calls the exchange “a hybrid of Amazon.com and Craigslist for gift cards.”
No question the Cardhub exchange is an interesting idea. The Tower Group reports that, of the estimated $87 billion worth of gift cards in the U.S. marketplace today, roughly $5 billion — about 6% — are categorized by Tower as “unused and expired” gift cards.
So the demand is obviously there, but how does the technology work? The Social Gift Card Exchange is built on twin pillars — cutting out the middleman and instilling trust in the gift card exchange process.
The Craigslist angle comes from the exchange’s platform, which allows gift cardholders to list and sell their cards to buyers with no fees attached. It departs from the script somewhat as CardHub also lists itself as a potential buyer of the gift cards.
The gift card exchange also allows cardholders to “trade up” from a less desirable card to a more desirable card. CardHub’s Web site gives a good example of how this works:
“This is particularly true if a user wants to trade a gift card to a very popular store, like Apple, to a slightly less popular store, like Banana Republic (Stock Quote: GPS). For example, if someone has an Apple (Stock Quote: AAPL) gift card worth $100, they’re likely to sell it for close to $90 because of Apple’s popularity. Then the same person can use the $90 to purchase a Banana Republic gift card worth $110. In essence, they’ve gone from having an unwanted $100 gift card to a gift card worth $110 at one of their favorite stores.”