Startup’s app converts gift cards to cash
Prepaid2Cash has launched a mobile app enabling recipients of card network-branded gift cards to convert them to cash — targeting what the National Retail Federation says is nearly $30 billion in funds spent via gift cards in the U.S. during the holiday season.
San Francisco-based Prepaid2Cash’s mobile app creates a path for consumers to direct the funds from any Visa, Mastercard, American Express and Discover-branded gift card to a bank account, according to a Tuesday press release.
After signing up for the service through Prepaid2Cash’s website or mobile app, customers may use their smartphone’s camera to scan a gift card’s account number. Prepaid2Cash charges a 7.5% processing fee plus a $1.50 fee for each deposit, and the remaining funds go to users’ bank accounts via ACH. The process takes two to three days, Prepaid2Cash said in the release.
A consumer with a $100 face-value gift card could expect to net a payout of $91, with a minimum gift card face value of $20 and a maximum of $500 in transactions per day, according to Prepaid2Cash’s website.
Prepaid2Cash’s fee structure is similar to the cost of using gift card exchanges for so-called closed-loop, or merchant-branded gift cards. Cardpool.com, for example, enables consumers to get back up to 92% of the face value of merchant gift cards in cash, by sending unused cards via UPS for verification and sale.
Cardpool, owned by closed-loop gift card giant Blackhawk Network, began working with LevelUp a few years ago to convert unused merchant gift cards to LevelUp credits.
Prepaid2Cash said it's working on adding more cash-distribution options, which could include PayPal or Venmo, according to its website.