This is by far one of the best YC ideas I've heard in a long time!
If you succeed, you're going to destroy balance sheets, move markets, and hopefully reform the gift card scam forever. But, you probably already know all this.
It's certainly a good idea, but they're not the first to come up with it. Plasticjungle.com seems to have been around since 2006 and looks very similar. A quick Google search for "sell gift cards" reveals several other similar sites as well.
What stops a scammer from writing down the relevant card numbers, selling the card to CardPool (or any competitor), and then still using the card after receiving payment?
First and foremost, our customers are always protected by this since we take on 100% of the risk associated with any transaction and we guarantee its full value.
Second, to protect ourselves, we've developed several methods of detecting high-risk transactions and ways to mitigate them (such as working with merchants to reissue new gift cards). I'd go into more detail, but we don't want the wrong people to get ahold of this information ;).
In the end though, we'll be fine. The fact that we mail the check to a physical address, make out the check to the seller's name, and the seller has to cash the check at a real bank, is already a big deterrent to bad behavior. These bad people will have an easier time trading their fake gift cards to people on sites like craigslist.
"There have been a number of auction-like marketplaces, such as Plastic Jungle and Rackup, that have popped up to allow users can buy and sell their gift cards to each other..."
"...CardPool is entering the space but with a slightly different twist to its model. Card Pool allows users to both buy and sell gift cards."
great question, the techcrunch article needs to be updated. but basically, we strive to have the simplest, most hassle-free solution, at the best prices.
all our gift cards have no fees and never expire and we offer a 100-day return policy, something no one else can claim. and since we are a small and lean startup, we can afford to focus purely on the consumer while offering the best prices. all of these features are unique to our startup and are the result of listening to what they want.
Are there any companies/non-profits/charities that would allow me to donate my gift cards that have a small balance on them but not enough to buy a product? Ideally I'd like to give this money to charity instead of throwing them away.
If you can create arbitrage situations for customers you can generate a decent amount of buzz in certain circles. Off the top of my head one way to do it is to offer to buy gift cards for more than 95% of their value. Some people have credit cards that give them back 5% on grocery store purchases and many grocery stores sell gift cards. If the folks on FatWallet Finance (http://www.fatwallet.com/forums/finance) get wind of it (heck, post it yourself) they'll jump all over it and you've got immediate exposure to hundreds of people. I would set limits though and do it only sporadically lest you end up w/ a huge surplus of gift cards that may take you a while to sell.
To get a sense for the kind of exposure you can get here's a thread from another arbitrage situation (buy dollar coins from the US government at face value, collect credit card rewards/cash back, deposit coins into bank account). These guys went nuts and the US Mint policies were actually changed to combat it. There's an article somewhere from a press conference where the US Mint publicly addressed it but I'm too lazy to dig it up right now.
http://www.fatwallet.com/forums/finance/837472
Also, on occasion people post in the forums questions like "How can I turn $X credit limit into cash." Set up relevant topic alerts (http://www.fatwallet.com/forums/alerts.php) and respond by letting them know they can buy gift cards and then convert them into cash on your site.
I'm a regular in that forum so let me know (contact info in profile) if you want any guidance in posting to FatWallet Finance.
I've often wondered if stores could make money selling discounted gift certificates with a time delay. It's 5% off, but not useable until 2 months after purchase. It'd probably be a hassle to handle, but I'd actually consider using gift certificates if they had something like that.
Very interesting, if you are familiar with the "Gold Pass" vs "Silver Pass" movie gift cards, there is a tiny subset of your idea built in there. The idea is Silver passes are cheaper than Gold passes, but you can only watch movies that are a bit dated, I think at least 10 days from release date.
Is there a way to view all the merchants you accept and what you percent you pay for them? I'm guessing the value depends on not just the merchant but also the value of the card and the expiration date so it may not be possible to just have a simple list view.
I ask because I'd like to refer you to a friend who has a boatload of credit card rewards points she needs to use and can get gift cards for the rewards points. If she could immediately see which merchant cards will give her the highest return it'd be a lot easier than tediously selecting each merchant and clicking "get offer."
absolutely. we verify every gift card when we buy it and when we sell it, and will refund your purchase for any reason, even if its because the retailer goes bankrupt, leaves town, or you simply change your mind. we are creating this service to solve the problems with gift cards and the last thing we would want to do it contribute to it :).
Most .com's are US based, and a lot of them don't deliver outside the US. While I agree that's not ideal, it's hardly a surprise. I do agree more services should work international: There's a lot more foreigners than people in the US :).
[+] [-] leelin|16 years ago|reply
[+] [-] andrewljohnson|16 years ago|reply
If you succeed, you're going to destroy balance sheets, move markets, and hopefully reform the gift card scam forever. But, you probably already know all this.
[+] [-] kpanghmc|16 years ago|reply
[+] [-] jadence|16 years ago|reply
[+] [-] anson|16 years ago|reply
Second, to protect ourselves, we've developed several methods of detecting high-risk transactions and ways to mitigate them (such as working with merchants to reissue new gift cards). I'd go into more detail, but we don't want the wrong people to get ahold of this information ;).
In the end though, we'll be fine. The fact that we mail the check to a physical address, make out the check to the seller's name, and the seller has to cash the check at a real bank, is already a big deterrent to bad behavior. These bad people will have an easier time trading their fake gift cards to people on sites like craigslist.
[+] [-] seanos|16 years ago|reply
"...CardPool is entering the space but with a slightly different twist to its model. Card Pool allows users to both buy and sell gift cards."
What is the twist?
[+] [-] anson|16 years ago|reply
all our gift cards have no fees and never expire and we offer a 100-day return policy, something no one else can claim. and since we are a small and lean startup, we can afford to focus purely on the consumer while offering the best prices. all of these features are unique to our startup and are the result of listening to what they want.
[+] [-] Retric|16 years ago|reply
[+] [-] physcab|16 years ago|reply
[+] [-] anson|16 years ago|reply
[+] [-] jadence|16 years ago|reply
To get a sense for the kind of exposure you can get here's a thread from another arbitrage situation (buy dollar coins from the US government at face value, collect credit card rewards/cash back, deposit coins into bank account). These guys went nuts and the US Mint policies were actually changed to combat it. There's an article somewhere from a press conference where the US Mint publicly addressed it but I'm too lazy to dig it up right now. http://www.fatwallet.com/forums/finance/837472
Also, on occasion people post in the forums questions like "How can I turn $X credit limit into cash." Set up relevant topic alerts (http://www.fatwallet.com/forums/alerts.php) and respond by letting them know they can buy gift cards and then convert them into cash on your site.
I'm a regular in that forum so let me know (contact info in profile) if you want any guidance in posting to FatWallet Finance.
[+] [-] milestinsley|16 years ago|reply
Although, it would be awesome if they offered digital delivery of gift cards that can be redeemed online in addition to delivery of physical cards.
[+] [-] justin|16 years ago|reply
[+] [-] luxiou|16 years ago|reply
[+] [-] sachin|16 years ago|reply
[+] [-] theycallmemorty|16 years ago|reply
[+] [-] vegashacker|16 years ago|reply
[+] [-] dmoney|16 years ago|reply
[+] [-] tlrobinson|16 years ago|reply
[+] [-] browser411|16 years ago|reply
[+] [-] smokey_the_bear|16 years ago|reply
[+] [-] leelin|16 years ago|reply
[+] [-] jadence|16 years ago|reply
I ask because I'd like to refer you to a friend who has a boatload of credit card rewards points she needs to use and can get gift cards for the rewards points. If she could immediately see which merchant cards will give her the highest return it'd be a lot easier than tediously selecting each merchant and clicking "get offer."
[+] [-] jmtame|16 years ago|reply
i didn't understand how this worked at first, here's a quick summary:
1) you look up the value of your cards online 2) you mail the cards to them 3) they mail you a check for the value (minus 10%)
[+] [-] unknown|16 years ago|reply
[deleted]
[+] [-] anson|16 years ago|reply
[+] [-] arihelgason|16 years ago|reply
[+] [-] coryl|16 years ago|reply
[+] [-] Batsu|16 years ago|reply
However, since they are gifts, you can always argue it was given to you.
[+] [-] gustaf|16 years ago|reply
[+] [-] alexkay|16 years ago|reply
[+] [-] PanMan|16 years ago|reply