At a time when every prepaid card seems to have a celebrity's face attached to it, GiftCards.com is looking to add a personality to its own lineup — and it's looking at a finance star, not a pop star.
To this end, the Pittsburgh-based online gift card vendor has purchased GiftcardGirlfriend.com, a Web-based guide to gift cards. As part of its acquisition, GiftCards.com is adding Shelley Hunter, the founder of GiftCardGirlfriend.com, to its staff as content manager, responsible for all brand content.
“The gift card space is faceless right now, there aren’t many people out there to connect with in terms of reaching people who are looking for ideas about gift cards," says Jason Wolfe, GiftCards.com’s chief executive officer. "I think Shelley’s perfect for this, since she’s been focused on gift cards for years. She is a significant personality within the gift card space, someone who is knowledgeable and we’re working with her to bring more life to gift cards."
At the same time, GiftCards.com is developing a spinoff company called GiftYa that will use email, mobile apps and social media to deliver gift credits to existing cards in an attempt to remove plastic gift cards from the mix.
Hunter’s joining GiftCards.com at a time of both opportunity and peril for the gift card industry. The use of gift cards is expanding, boosted by a change to the CARD Act that removes some fees and expiration date pressures—CEB TowerGroup says the gift card market in 2012 increased more than 10% to nearly $110 billion in the U.S. But gift card fraud is also on the rise, placing consumers at risk since they bear a financial burden for gift card losses.
Hunter will reach out to consumers on the GiftCards.com site via blogs and other methods —commenting on security as well as different options for giving cards.
“I started GiftCardGirlfriend.com strictly to show creative ways in which I deliver gift cards. But I learned quickly that consumers want more help than that," Hunter says. "They need advice on things such as how much money to put on a gift card, ways to avoid gift card fraud, advice on whether you can give a gift card to a child, and so forth.”
GiftCards.com is also moving forward on GiftYa, a spinoff company that plans to sell gift amounts redeemable through normal payment cards.
Consumers buy a GiftYa gift credit from merchants, and deliver the credit to a friend or relative—the gift is announced via an email, text message or Facebook post which contains the sender, amount and merchant. The recipient redeems the gift by making a purchase with any card in their wallet, which will be credited in the amount of the GiftYa gift credit.
GiftYa is set to launch sometime during the first half of the year, and recently received a $1 million investment from Wolfe. The service is driven by a patented proprietary tech system that enables the loading of credit onto the recipient’s card, as well as the execution of the payments. Wolfe did not discuss GiftYa’s underlying tech in detail, saying the product is still in development.
GiftCards.com and its GiftYa spinoff are also challenged to adapt to the role mobile commerce plays in gift cards. GiftCards.com offers plastic and mobile gift cards, and GiftYa will rely partly on mobile delivery. Mobile gift cards are still a small part of the overall gift card market — Mercator says about 5% — but that’s expected to expand in the coming years.
CashStar, a digital gifting and incentive company, reported in early February that mobile gift cards increased more than 800% during the 2012 holiday season over the prior year, with 3,700% more sales than brands that were not carrying mobile gift card options.
A number of merchants are pursuing gift cards, including Pinkberry, a frozen dessert chain that’s allowing consumer to make payments and redeem loyalty rewards via a mobile app, as well as send gift cards from one mobile app to another. Starbucks and Dunkin Donuts also sell virtual gift cards though their mobile apps. And Square in December introduced a gift card system that users can redeem using its mobile wallet and Apple’s Passbook app.
Hunter, who is not expected to play a role in GiftYa, says discussing the intersection of gift cards with mobile delivery will be a major part of her job at GiftCards.com.
“A couple of years ago, I heard predictions that mobile gift cards would eventually wipe out plastic. While I’m sure that’s in our future, consumers aren’t there yet. I’m not there yet. I still want to present someone with a gift. I still want to open more than just a text message on my birthday. But 15 years ago, I didn’t think I needed a cell phone either. So I see the challenge in helping people like me feel good about the gift card exchange much in the same way I think plastic cards need a little dressing. The electronic delivery, no matter how quick and high-tech it is, still needs to allow the giver and the receiver to make an emotional connection with one another,” Hunter says.