New HBC program lets customers exchange unwanted gift cards

Many of us have gift cards to redeem after the holidays — even if a lot of us aren't using them. But now one major retailer has joined a growing number of apps and websites in trying to help consumers spend that money.

Hudson's Bay joins apps, websites in helping consumers trade in gift cards

A Queen's University marketing professor says gift cards have effectively become a new form of currency. (CBC)

Many of us have gift cards to redeem after the holidays — even if a lot of us aren't using them.

Spillage — or the amount of unused gift cards in circulation — remains a problem for consumers, with one estimate saying that at least $500 million US of the estimated $130 billion worth of gift cards sold in 2015 will go unused.

Now, one major retailer has joined a growing number of apps and websites trying to help consumers spend that money.

Hudson's Bay has launched a new program which allows shoppers to swap other stores' gift cards for Bay gift cards. (Mark Blinch/Reuters)
Hudson's Bay Company recently announced a redemption program that appears to be a first in Canadian retail landscape.

The program allows customers to trade in gift cards from other stores at Hudson's Bay, and accumulate credit with the store.

The program is managed by the Canadian company CardSwap — a business that allows consumers to redeem unwanted cards online for a lesser amount in cash.

Gift cards a marketing opportunity

The Bay's move is a sign of the times according to Ken Wong, a professor of marketing at Queen's University's Smith School of Business.

"What I think you're seeing in the Bay, however, is the recognition that these retail cards also have a marketing application," he said. 

Queen's University's Ken Wong says gift cards can be used as a marketing tool for retailers. (Queen's University)
"They can indeed be used to attract new customers, and in some cases to retain and reward existing customers. And it's really just, I think, the tip of the iceberg."

Wong may well be right about the tip of the iceberg, if the growing number of card swapping apps and websites is any indication.

Swappable, for example, is an app which launched in the past year. It allows users to buy and store gift cards on a smartphone, and quickly exchange them. Balances on your cards are accessible through the app, and you can scan cards directly from your phone.

Wong says it's all a sign that gift cards have effectively become a new form of currency, and companies are figuring out that currency — particularly once it's in digital form — can be used as a marketing tool.

"Now you also make it possible to link, perhaps, some marketing content to those cards," he said.

"So maybe once you've accumulated a number of dollars on a card, I recognize you as a patron. And maybe I start to push out to you emails or other communication on topics of interest to you."

New ways of shopping bring new scams

Wong cautions that the more we move to any new currency, the more likely we will see scams and fraud.

"We've heard stories of people going in and copying down card numbers, waiting for them to be activated so that the funds can be moved or somehow used," he said. 

"The criminal mind is no less creative than the marketing mind."

The Red Cross has partnered with CardSwap on a charity campaign which allows people to donate the cash value of gift cards to the Red Cross' Syrian refugee efforts. (CardSwap.ca)
On a more positive note, though, gift cards are also now being used for charitable purposes.

For example, the Red Cross and CardSwap have partnered on a program that lets users donate gift cards to help Syrian refugees.

The cash value of the donated card paid out by CardSwap to the Red Cross varies from 60 to 92 per cent of its face value. 

About the Author

Jason Osler

Jason Osler is the national 'trends' columnist for CBC Radio.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.