New HBC program lets customers exchange unwanted gift cards
Hudson's Bay joins apps, websites in helping consumers trade in gift cards
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.
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.
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."
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.