Kiind, a business-to-business rewards startup, is the latest to offer a gift card platform in which senders don't pay for the gift until the recipient uses it.
Because between 10% and 20% of gift cards are never used, "there's a huge problem with waste in the gift card industry," says Leif Baradoy, cofounder and CEO of Kiind. "Especially for businesses that are using gift cards [for rewards] that can represent some pretty major inefficiencies that could dissuade them from giving incentives and rewards."
Kiind launched its product across North America on July 10 after a limited public beta in Canada, where the company is based.
Kind's platform is similar to Tango Card's in its pay-for-use model.
Kiind charges a small processing fee to send gifts through its system and either a flat monthly subscription fee or 49 cents per gift when used. But Kiind lowers the price per card depending on the number of cards a customer sends.
Online gift cards have become a popular product recently and the market is becoming crowded, Baradoy says. "It's a joke with people now that it seems like digital gifting startups are the new daily deals companies," he says.
The digital gift card market is "certainly a busy space but it lacks quite a bit of innovation with most using the existing prepaid gift card model and not trying to solve the root problem of waste that make gift cards unnecessarily expensive," Baradoy says.
Kiind's platform not only reduces waste, but also allows businesses to customize the offering.
"By deferring when the payment takes place we can increase the flexibility of the gift offer such as offering someone the choice between multiple options, like an Amazon or Gap gift card or a year subscription to Rdio," says Baradoy. Kiind also allows the recipient to turn the gift into a charitable donation instead of using it, he says.
Because Kiind is delivering offers instead of gift cards, the company is not beholden to laws governing the use of gift cards, says Baradoy. For example, unlike gift cards, Kiind's offers can expire, he says. They can also be revised with a new offer if the original offer is not used, he says.
Kiind has approximately 10,000 users, with more than 2,500 of those customers making purchases since its launch nearly two months ago, Baradoy says. Customers include branch managers at financial services companies, sales managers who want to reward associates and human resource managers at companies of 250 to 500 people, he says.
Kiind works with more than 45 vendors, including Amazon.com, Footlocker, Columbia Sportswear Co. and Tony Roma's.