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.