More companies are testing ways to turn unwanted gift cards into valued forms of payment.
The latest is TouchSuite, which lets merchants using QuickBooks POS accept unwanted gift cards that customers can exchange at the market value of that card. Similar programs from companies like CardCash (owner of Plastic Jungle), Zeevex, PayGarden and Open Bucks endeavor to let users sell off unwanted gift cards or exchange them for some other value.
TouchSuite's Lightning Payment software allows a merchant to accept an unwanted card and place it into the Boca Raton, Fla.-based vendor's Gift Card Exchange. The consumer turning in a card can use the value to make another purchase at that merchant, exchange it for the merchant's gift card or (if the merchant supports the option) accept the value in cash.
The merchant swipes the gift card or enters the brand, balance and account number into the TouchSuite Exchange, which immediately provides the current market value of the card. A $100 gift card for a restaurant, for example, may bring $70 or more on the exchange.
There is no bartering about the exchange offer allowed, so as to not delay the payment process, said Jeff White, vice president of developer integrations for TouchSuite.
Gift card exchanges have typically been done online, and TouchSuite says it is the first to bring it to individual merchant point of sale terminals.
"We saw a need for alternative payment methodologies, because we are seeing alternative currencies like Bitcoin and others come into the market," White said. "To solve the need of a person with a gift card they do not intend to use at that location, it would be nice to use that as an alternative form of payment."
TouchSuite obtains the unwanted cards from the merchants and sells them wholesale in bulk to companies interested in establishing programs offering discounted gift cards, White said. In the future, TouchSuite may consider a consumer-facing marketplace for the gift cards it collects.
There is no cost to the merchant for using the gift card exchange, and chargebacks on products purchased as part of those exchanges are not an issue because the merchant receives payment for the card in less than two days, White said.
If a merchant using Lightning Payment exchanges a card at a 15% discount, TouchSuite may sell that wholesale at 7.5%, making a small profit on each card, White said.
"We are just now rolling this out, but we are expecting to see tens of thousands of cards exchanged annually," White said.
Lightning Payment handles the payment processing on the TouchSuite platform, which can also accept EMV-chip card payments and encrypt data en route.
The gift card program is available to U.S. merchants now, and TouchSuite is planning a future expansion into Canada. The company estimates that 4.3 million merchants use QuickBooks POS in the U.S.
The gift card exchange may appeal to consumers, but retailers have expressed concern in the past because they don't particularly like seeing their cards placed at a lesser value than a competitor on an exchange, said Ben Jackson, a senior analyst at Mercator Advisory Group.
However, the merchants receiving the cards can benefit by serving customers they may not normally attract, Jackson said.
"They have to make sure their own brand or sales don't get cannibalized," he added. "You don't want to become a dumping ground for everyone's unwanted gift cards at the expense of your own card or loyalty programs."