I got interested in the Secondary Gift Card market in 2003 after reading about Swapagift.com when they first launched. The Secondary Gift Card market is the ‘buying and selling of unwanted gift cards’. I thought the idea was a good one. Basically, if a user has a gift card they do not want – they could swap it with someone whom has a gift card that they do want. Ironically, at the same time I just bought GiftCards.com and was thinking of services to add to the site. This was one of the ideas I thought about. The gift card industry grew, in fact gift cards are the #1 gift since 2007 (1). I ended up buying Swapagift.com in 2008 from MJ and Mike Kelly. That year gift card sales were about $91B (3) and unredeemed gift card values about $9 billion. I figured anyone can get a gift card at Wal-mart and there was no reason for them to go to GiftCards.com, but if they can go to GiftCards.com and buy a discounted gift card – it would be worth the time. The market has grown and in 2011 it was the largest since 2007 (2). Merchants were initially resistant to letting websites offer the buying and selling of their gift cards on the Secondary Market.
Here are some facts about the Secondary Gift Card market:
(Sources: Nilson Report, Tower Group, Dan Horn, and NewBold Corporation)
If Merchants permit the Secondary Gift card market to exist, and they support it some benefits are: