Gift Card Blog - ScripSmart

New Discount Gift Card Providers on ScripSmart

Everyone likes getting a good deal; it's one of the reasons people like consumer friendly gift cards. Another way of getting a great deal is by paying less than full price for a gift card. This week ScripSmart added two new feeds for discount gift cards.

The two additional feeds are Giftcard Zen and Gift Card Place. We think they'll help you find the best deals on the secondary gift card marketplace.

How Discount Gift Cards Work

There are several players in the secondary gift card marketplace. In short, sometimes people receive a gift card and they simply don't want to use it.

For example, I recently chatted with a woman who owned a $100 Olive Garden Gift Card, but did not have an Olive Garden nearby. Because the gift card can not be used online, it was better for her to sell the gift card for cash, even if it was for less than the value of the gift card.

Let's say she received 77% of the face value in cash for her $100 gift card ($77 for a $100 gift card). After she gives the gift card to the third party, it's listed for sale at less than face value but more than the amount they paid. In this example, if the Olive Garden Gift Card was sold to a new consumer at 11% off or 89% of the face value, the secondary gift card marketplace takes the difference (89%-77% or 12%) as profit.

Because there are several companies competing to buy and sell gift cards, there can be quite a difference when buying discounted Olive Garden Gift Cards. At the time of writing this the discounts range from 8-11% off. If you frequent the Olive Garden, that can result in a significant savings.

More Feeds To Come

We're currently pulling in data from 4 different service providers: Giftcard Zen, Gift Card Place, Cardpool and Giftcards.com.

In the coming weeks we'll be adding even more feeds. At the end of the day, the secondary gift card market offers meaningful value to consumers. It's also common for people to buy discounted gift cards for themselves. In fact, often the balances are an unusual amount because a gift card might be sold after it's already been used.

 

10 Most Popular Gift Cards of 2012

Here at ScripSmart we track the terms which people search on the site. It helps us discover new gift cards to rate and also gives us an idea of what type of coverage we have as a whole. It's all very helpful in making ScripSmart better.

This year, I thought it would be fun to take a look at which gift cards have been search for most during 2012. Here is the top 10 most popular gift cards of 2012 based on search requests. 

1. Amazon

2. Target

3. Walmart

4. Best Buy

5. Starbucks

6. American Express

7. Home Depot

8. Lowe's

9. Chilies

10. iTunes

Looking at the list, it seems about right. I thought you'd others might find this interesting and think this is a fun way to see which gift cards are most often thought of in minds of consumers.

Keep in mind, our data just indicates the brand a consumer was searching for, not the type of gift cards (electronic vs plastic). 

Happy Holidays!

Discounted Gift Cards - A Great Way To Save This Holiday Season

Happy Cyber Monday! Deals can be found across the web and they'll last longer than today, too. If you'd like to save even more on your holiday shopping this year, consider buying discounted gift cards and using them to purchase gifts for your loved ones.

In the past, buying discounted gift cards needed to be physically shipped to the purchaser. However, some companies now offer near immediate access to your gift card with electronic delivery. These discounted e-gift cards can be a great option for further increasing your savings when shopping online.

ScripSmart, publishes inventory from three major players who sell discounted gift cards: Giftcards.com, Cardpool and Plastic Jungle. Not every gift card offers electronic delivery, but several do and ScripSmart let you know the difference with a small box under the Buy Now button.

One great aspect of using discount gift cards to purchase actual items is you don't need to worry about the gift cards with odd balances such as $71.41. This really opens up your options when buying. Just make sure the balance of the gift card is less than you intend to spend and pay for the remainder with cash or credit card.

I've notices the inventory levels this time of year are lower than normal. I suppose consumers are stocking up, using gift cards to buy products and also preparing to give gift cards. So, be sure to grab one sooner than later and come January, you can expect to see an increase in the options available. Finally, you can purchase and save with discounted gift card year round.

32 Days of Gold Gift Cards From ScripSmart

Today is Black Friday, a day which has come to signal the first day of the holiday shoping season. Millions of Americans are out hunting for the perfect gift and this year many while choose to purchase gift cards.

According to the National Retail Federation, 80% of consumers would buy at least one gift card this holiday season. The study also suggested 6 out of 10 consumers said they would like to receive a gift card and a total of $28.79 billion will be spent on gift cards during the 2012 holiday shopping season.

Simply put, gift cards are extremely popular with both givers and receivers. However, not all gift cards are created equal. The good news is there are plenty of excellent gift cards available and we'd like to recognize those who are at the forefront of offering the most consumer friendly gift card programs. 

Starting today and leading up to Christmas Eve, we're going to specially acknowledging one gold rated gift card each day. We'll publish a list of the thirty-two gold gift cards, announce via twitter and display each day's featured gift card on our homepage.

We're doing this because each year we see a slew of press pieces on why gift cards are bad and how they should be avoided. While there are plenty of gift cards with low ratings on ScripSmart, not all gift cards are bad and many of those articles are misleading. The truth is, many gift card issuers do an excellent job of exceeding legal minims  and offering product features the law does not require.

So, if your in the market for a gift card this holiday season, take a look at the ratings on ScripSmart and support those who are leading the way and have been awarded a gold badge from our algorithm. Believe me, it's not easy to archive and these guys deserve to be recognized for taking the effort to offer a best of breed product.

Changes to ScripSmart's Algorithm and Gift Card Layout

A few months ago, I wrote about ScripSmart's gift card ratings as it relates to bank-issued gift cards, and whether or not our algorithm was giving them a fair shake. The short answer was no.

While we were doing a lot right, there were a few areas where changes would benefit both consumers whom use our ratings, and those who we rate by making it a bit more fair. In the end, a dialogue with members of the bank-issued side of the gift card industry has helped make ScripSmart better. A big thanks to those who took to time to reach out and be a part of the process.

I don't like to update ScripSmart's algorithm. After all, we have merchants like Bass Pro and Cinemark who tout their gold badges where selling gift cards. In the end, we want merchants to be able to rely on their ratings. However, we do make changes to our algorithm; some times they are minor, other times they are much more noticeable. This is one of the times it's more going to be more noticeable.

As such, I figured it was also a good time to loop in members of the store-issued side of the gift card industry. In fact, I presented to The Retail Gift Card Association (RGCA) in September. The RGCA and ScripSmart have a similar goal of making gift cards better. A huge thanks to those in the industry who appreciate what ScripSmart is doing to help consumers and gift cards. With their feedback, ScripSmart's ratings are now even better.

In the end, we've altered our rating algorithm. We also introduced a new column on ScripSmart: the grey column. Basically, the grey column consists of gift card attributes which are lightly weighted or perhaps not weighted at all. In the end, we think this helps make it more clear as to what is great and what needs improvement for a gift card.

Here is an example of the new grey column:

Average Score Is Down

Before our we updated our algorithm, the average score of a gift card was 72 and after the update the average score is 70. We lightened up the weighting of several attributes and increased the weighting on a few others. In the end, we really want a gold badge from ScripSmart to mean something great and that means it should not be easy to obtain.

We pushed the changes live earlier this week and have notified merchant's of the new scores (assuming they signed up for a ScripSmart Issuer Account). We've also been reviewing our data to ensure nothing is our of the ordinary.

One Outstanding Item

Frankly, we've had these changes competed for quite some time. However, there has been one outstanding item regarding the FinCEN rules for gift cards.

When discussing the rating system with issuers we learned of a concern regarding cash-back policies and a potential conflict with FinCEN laws. In short, there is a question regarding gift card issuers who offer a cash back policy and whether or not they will forfeiting an exemption offered to gift card products.

I've reached out to representatives at FinCEN and they were rather helpful. I've been told there will be supplemental guidance in the near future. However, I've not seen the guidance and I want to get the new algorithm and layout live so consumers shopping for gift cards this holiday season can benefit from the enhancements we've made to ScripSmart.

I'm expecting the team at FinCEN to say cash back policies do not result in a forfeited exemption. However, they may not and if merchants are simply following the law with by not offing cash back policies, we will reevaluate how we weight such an attribute.

If you have any thoughts or questions, feel free to send us a note via email.

New Jersey Gift Card Cash Back Law Goes Into Effect

Just like last year, many New Jersey residents will be buying gift cards this holiday season. However, there is one important difference for 2012: all gift cards sold on or after September 1st, 2012 can be redeemed for cash if the balance if less than $5.00 and the gift card has been used at least once.

To clarify, this is only for gift cards sold after the effective date. In other words, if you have a gift card which was purchased anytime before September 1st, 2012, the merchant does not have to provide cash back.

Also, the gift card must have been redeemed at least one time prior to requesting cash back. For example, if someone gives you a gift card for $4.99, the merchant is not required to provide cash back until you use the gift card to buy some merchandise. If you can buy a pack of gum for 99 cents and have a remaining balance of $4.00 you can ask for the reaming balance in cash and they are required to give it to you.

New Jersey got this one right

I have not been a fan of what New Jersey legislators have done with gift card laws. I'm happy to say they got this one right. Here is why:

• $5.00 is a reasonable threshold and strikes a good balance between gift card issuers and gift card holders. It's also easy for everyone to understand.
• By requiring a gift card to be redeemed at least once, they prevent the possibility of a gift card never being redeemed and the merchant being forced into giving cash back. This just seems fair to me.

What to if a merchant refuses to gift you cash back

It's bound to happen: a consumer will request cash back for a gift card and the merchant will refuse. If this happens to you, do not worry and do not get overly angry. Here are some tips.

1. Ensure your gift card is eligible for cash back. (See requirements above)
2. Find out if the merchant is aware of current New Jersey gift card law
3. Ask to speak to a manger

If all else fails, your next option is to contact the Attorney General for New Jersey and file a complaint. My intuition tells me if a merchant refuses to give you cash back, it's because they are unaware of the changes to New Jersey's gift card laws.

Free Shipping Coupon: The American Express Gift Card

The American Express Gift Card is a great product and they've recently provided ScripSmart a promotion code for free 2 day shipping: just enter the American Express promotion code AFLQ32012 when checking out. This offer is valid in the months of July, August and September of 2012 and will save you $8.95 on shipping costs.

Full disclosure: ScripSmart will earn commission by referring your business.

A few things we like about the American Express Gift Card

First off, it's redeemable anywhere American Express is accepted (online too!). So, the person who recives the gift card will have plenty of options to get something they like. There are also no fees after the gift card is purchased, the funds never expire and you can get a replacement gift card free of charge (just in case it's lost, stolen or damaged). 

Register before redeeming online

If you plan to use an American Express gift card online you're going to need to call 1-877-297-4438 to register the gift card. Basically, card registration is the equivalent of adding a billing address to the gift card. This is necessary because just about every ecommerce merchant will check to see if the person placing an order also knows the billing address. While it may seem inconvenient, it's a good thing because it helps prevent the unauthorized use of your gift card.

Currently the American Express Gift Card does not have an option to register a gift card online. We'd love to see such an option because it's faster and therefore more convenient for gift cardholders. It's also something we'll adding to our rating algorithm which is scheduled to be released in a couple of weeks.

One last thing: the notion of registering a gift card (adding a billing address) is not unique to the American Express Gift Card. It's actually something which is required by the vast majority of bank-issued gift cards.

Amazon Gift Cards And Same Day Shipping

Amazon.com recently started offering 'Local Express Delivery'. Basically, they are breaking the one day shipping barrier and delivering items the same day in which they are ordered. Not every product on Amazon.com is eligible; however, one item which is always eligible for same day delivery is the Amazon gift card.

While there is an additional shipping cost of $3.99, this is a great option for those who prefer to have a physically gift card as opposed to an eGift Card. Currently, Amazon can deliver a plastic Amazon.com gift card to the following markets:

• Baltimore
• Boston
• Chicago
• Indianapolis
• Las Vegas
• New Your City
• Philadelphia
• Phoenix
• Seattle
• Washington DC

Keep in mind, each market has a cut off time in order to make the magic happen. They range from as early as 7AM in Chicago to as late as 12PM in Seattle, be sure to check your markets details for more information.

Bottom Line

If your in a pinch for a gift card and your recipient lives in the same city as you, heading down to the local gift card mall may still be yoru best option. However, if your recipient lives in one of the 10 markets listed above and you do not live in the same city, this becomes an extremely attractive option.

 

Some Options When a Business Closes And You Still Own A Gift Card

The other day, I received an email from a consumer, he writes:

"I have a $50 gift card from Sparx a family restaurant that closed down suddenly because it is being sued by the government for racial discrimination. What recourse have I?"

This is a great question and it's important to keep in mind: gift cards are essentially a form of unsecured debt. When you buy a gift card you're giving the company an advanced payment for service to be provided later.

When you receive a gift card as a gift, the ownership of that debt has been transferred to you the gift cardholder. Here are a couple of questions to ask when a business closes it's doors:

Are there other locations still in business?

If the answer is yes, (even if it's inconveniently located) the gift card may still be redeemed for goods and services and your best option is to get out there and use your gift card. If traveling to an alternate location is unreasonably far away, call the business, explain your situation and and see if they will provide a refund.

Keep in mind, it's not required they provide such a refund, because you can technically still redeem the gift card. Another option is to sell or trade the gift card online or with a friend.

Did the business file for bankruptcy protection?

If no locations remain open, it's likely the business filed for some for of bankruptcy protection because it was unable to meet it's financial obligations. In this scenario, gift cardholders are out of luck. In short, they must stand in line with all other creditors to be repaid and, as it turns out, gift cardholders fall low on that list because of their nature (unsecured, low dollar amount per creditor, etc.). 

It's possible the business closed and did not file for bankruptcy protection. In this scenario, you should contact the business owner and request a full cash (check) refund. In short, you are still owed goods and services and the business is unable to provide such service; therefore, a refund is appropriate. It would be similar to being a supplier who delivers steaks for the last week a restaurant is open. The should still receive payment for the services provided.

If you contact the business and they are not willing to give you a refund (and they did not file for bankruptcy protection), contact your state attorney general's office and and ask for guidance in the matter. After all, there are likely many others in your same predicament.

Will competing business accept the gift card?

Accept a competitors gift card after they go out of business has become a savvy marketing move. Basically, it's a great opportunity for a business to attract new customers and gain goodwill within the community. A competing business may not be able to verify the balance of another company's gift card, so they may offer a free appetizer or a percentage off your meal. While it's not be the full value of your gift card, at least you'll get something out of it.

A Gift Card Best Practice

It's always a smart to redeem a gift card sooner than later. By leaving a gift card in your wallet or drawer you're dramatically increasing the chance of losing value. It could be from a business going under, post-sale fees, expiation dates or simply forgetting about and loosing the gift card.

We understand it's not easy to remember which gift cards you own. As a result, ScripSmart offers a free account system for registering gift cards. Just sign up, add the gift cards you own to your ScripSmart account and we'll send you a monthly reminder via email.

Is ScripSmart Giving Bank Issued (Visa) Gift Cards A Fair Shake?

A few weeks ago, a gift card manager from a company who sells bank-issued gift cards reached out to let me know there were some inaccuracies on ScripSmart for her product. Naturally, we quickly corrected the data and I thanked her for reaching out. Then our conversation took a more philosophical direction: one of ScripSmart's algorithm and how it rates bank-issued gift cards. In short, she thought ScripSmart was not giving bank-issued gift cards a fair shake.

Heads up: I'm using the term bank-issued gift cards to refer to gift cards which have a Visa, MasterCard, American Express or Discover logos and can be redeemed anywhere their credit card counterpart is accepted.

She brought up some very good points as to where ScripSmart was falling short. I explained there was currently a distinction in the algorithm for bank cards (recognizing they can be redeemed at multiple independent businesses), but for the most part we had focused on store-issued gift cards and her points were valid. (As of today, ScripSmart has rated 776 gift cards and just under 5% are bank-issued.)

Areas of improvement

Here a few places where ScripSmart's algorithm may change:

• Some bank-issued gift cards offer consumer protection if it's fraudulently used, e.g. Visa Zero Liability.
• By law, bank-issued gift cards can not be reloadable (money laundering concerns).
• Bank-issued gift cards do not have the same risks of becoming worthless as the result of a bankruptcy. This is a big plus: both the Borders and Blockbuster gift cards are now worthless.
• Some banks sells bank-issued gift cards without charging a standard purchase fee, however only those who are customers can buy the gift cards.
• Gift card registration: in order to use a bank-issued gift card for online purchases, the cardholder must add a billing address to the gift card. Some gift cards offer phone and online registration others offer just phone phone registration, and believe it or not, some can not be used online.
• An industry norm is the requirement of valid thru' dates. It's the result of leveraging the credit card industry's current system and there are no bank-issued gift cards which do not have such a date.

The list above is by no means a final list of what will change. However, there is clearly an opportunity for ScripSmart to help consumers understand the difference in quality among bank-issued gift cards and produce ratings which better reflect the marketplace.

A problem with the rating system or a problem with the products?

Another point came up on the call: there are currently no bank-issued gift cards which rank in ScripSmart's top tier and receive our gold badge. It begs the question: Is this a result of the products in the industry being unfriendly or is ScripSmart's algorithm missing the mark?

Frankly, I think it's a little of both: bank-issued gift cards are often riddled with fees and some monthly inactivity fees are as high as $5 a monthly which seems onerous. On the other hand, there are bank-issued gift cards which have no fees, never expire and are clearly a best of breed product, but they score in the green.

Stay tuned

It's unclear how this will shake out: we've already started testing changes to our scoring alogrithm, but nothing has been finalized. In the end, ScripSmart is focused on producing fair, accurate and helpful ratings of gift cards and there is clearly an opportunity for us to improve how we rate bank-issued gift cards.