Americans will spend more than $26 billion on gift cards in 2007.
A major gift card exchange site has launched an unusual gift card program that guarantees all exchange transactions.
The Plastic Jungle guarantee plan is done by insisting that card sellers give a verifiable physical address along with a credit card number associated with that physical address. Payment is then made solely by mailing a check to that address, made out to the name on that credit card. The check isnt issued until the buyer receives the gift card. The guarantee is also capped at $1,000.
"We wanted to separate ourselves from the rest of the secondary gift card market," said Plastic Jungle CEO Tina Henson. "We want to make (sellers) accountable for the transactions they incur. Today, they all hide behind PayPal and e-mail addresses."
Plastic Jungle will encourage buyers to verify (via Web or phone) the gift card balance as soon as possible, but it will give them 15 days to check. In an ideal security setting, no check would be issued until the buyer verified that the card had the promised value, but Henson said her company had to make some compromises. "We have to somewhat limit the restrictions," she said, asking: "How many sellers will want to sell on our site if they have to wait 20 days to get paid?"
Henson said Plastic Jungle is negotiating with eBays PayPal group to try and allow Plastic Jungle to accept PayPal payment, but only if eBay is willing to associate physical addresses with their customers.
To read about the rumors and realities of gift card fraud, click here.
Plastic Jungles pricing is a 10 percent cut of the transaction, but they do not charge any listing fee. "We really care if you sell it because we dont make any money if you dont," Henson said.
To that end, Henson said her site will soon have a price adviser feature, which will display the last 3-5 transactions for an identical gift card and suggest a price that is 85 percent of the value of the card.
Other new features of the site include GiftGuru, which asks for age, gender and relationship of the gift recipient and then suggests appropriate cards to buy and a wish list where customers are sent an e-mail (and soon a text message) when a desired card becomes available. A program for customers to check their gift card balances online is also pending.
A program Plastic Jungle announced last week—called PlasticVault—allows customers to store a wide range of gift card numbers, including many that the customer has no intention of trying to sell. The idea is to help those cards get replaced if they are lost, stolen or damaged as well as tracking account balances and transactions on those cards.
Not all retailers will honor such a program and will insist on a receipt for those gift cards. BestBuy is a large chain that today does not
require a receipt, but among those who insist on a receipt are RadioShack, the Gap and Chicos (which also wants to know the identity of the original purchaser), Henson said.
Retail Center Editor Evan Schuman can be reached at Evan.Schuman@ziffdavisenterprise.com
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