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 Managing them all is not just unwieldy, it is also risky since gift
cards are like cash and cannot be replaced if they are stolen.
Gift cards, which become more popular by the year, have long been a
challenge to consumers who leave them in drawers, lose track of
their value or just never get around to using them.
At least $500 million of the estimated $130 billion worth of U.S.
gift cards sold this year will go unused, consulting firm CEB
TowerGroup said.
Kamimura, a 53-year-old stay-at-home mother from San Gabriel,
California, found an app called Slide that let her consolidate that
pile of plastic into an easy-to-use tool for her smartphone.
"It has made my life so much easier," Kamimura says. "My gift card
carrier was so big, and I feel much safer."
Gift card organizing apps make things simpler by consolidating cards
to single place that displays their value and allow them to be
spent. The apps generate a bar code for cashiers to scan and draw
down the value of the card.
The apps, which are free, make their money by taking a percentage of
the gift cards they sell. They allow users to enter their cards
manually, by scanning or a combination of the two.
The biggest player in this market is Gyft, while others like Slide,
GoWallet and eGifter are expanding offerings.
The bulk of the overall gift card market is dominated by physical,
plastic gift cards, says Gyft co-founder CJ MacDonald. By contrast,
e-gifting (when you email a gift card from a retailer like
Amazon.com) has only about a 5.5 percent share.
The biggest problem with organizing these gift cards electronically
is the lack of a standard numbering scheme.
"Everybody has different format," MacDonald said. "They're not like
credit cards."
While the apps do a better job of tracking the gift cards they sell,
they will also capture those from local businesses.
If Slide does not automatically pull in the card's balance, its
staff will get the information for users, Chief Executive Officer
Michael Morris said.
To help consumers spend down their balances as quickly as possible,
Slide maps the closest retailers that match the cards in a user's
collection.
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While spillage, or the amount of wasted gift card balances, has been
halved from $1 billion two years ago, it remains of some concern to
consumer advocates.
"The biggest problem is givers' basing gift card purchases on their
own preferences rather than the recipient's," said Providence
College marketing professor Dan Horne. "Gift cards tend to be
purchased when the giver has 'low knowledge' of the recipient's
wants and needs, so this problem occurs fairly regularly."
That is why Horne still sees an upside to gift card apps.
"The apps can deal with organizing and reminding, which are good
things," he said. "They might partially eliminate the problem with
the remainders when a gift card has too little value, at the
particular merchant, to make it worthwhile to carry the card."
Retiree Wendy Benedict, 65, of Novato, California found Gyft after
she lost two Nordstrom gift cards. The simplicity of the app and
knowing she has the cards with her at all times make it worthwhile,
she said.
"All I do is pull out my phone," she said, "and voila."
(The author is a Reuters contributor. The opinions expressed are his
own.)
(Editing by Lauren Young and Lisa Von Ahn)
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