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Table of Contents

Lead Story

Closing the door to backdoor breaches

News

Industry Update

Verizon study calls for improved PCI security

Marketplace Fairness Act to even score online, offline

Congressional payments caucus a positive for industry

CFPB takes on consumer lenders, card market

Transact 15 highlights global trends in payments

Features

Countering affiliate, aggregation fraud

Selling Prepaid

Innovation in gift card exchanges

Views

NACHA seeks seat at mobile payments tabl

Patti Murphy
ProScribes Inc

Mobilizing the sales force

What Sweden can teach us about the future of payments

Kirsty Tull
BillPro

Education

Street SmartsSM:
Let's share stories, grow our businesses together

Jeffrey I. Shavitz
Charge Card Systems

Exiting your business

Vicki M. Daughdrill
Small Business Resources LLC

Apple Pay & Samsung Pay Contrast

Differentiate and build trust to stand out

Jeff Fortney
Clearent LLC

Oral promises and ISO contracts

Adam Atlas
Attorney at Law

Company Profile

Field Guide Enterprises

New Products

All-in-One Mobile POS app

PayStand
PayStand

Remote device management for IoT era

SUSIAccess 3.0
AdvanPOS Technology Co., Ltd.

Inspiration

Let go or get dragged

Departments

Readers Speak

Resource Guide

Datebook

Skyscraper Ad

The Green Sheet Online Edition

April 13, 2015  •  Issue 15:04:01

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Selling Prepaid:
Innovation in gift card exchanges

Since the rise of gift cards as popular gift items, unused funds on these cards have skyrocketed. Enter the gift card exchange. Cardpool Inc., Raise Marketplace Inc. and CardHub are among the established online exchanges that help consumers dispose of unwanted gift cards in exchange for an agreed upon portion of card balances. Generally speaking, consumers receive cash, a check or another preloaded gift card in the exchange.

The latest innovator in this realm is TouchSuite, which now offers a gift card exchange service directly to retail and salon merchants who are linked to its patented Firefly POS system and auto-sync Lightning Payments interface. The service allows customers to exchange more than 100 top-branded gift cards as currency at participating merchants.

"We're the first in the world to bring a gift card exchange to an in-store retail experience," said Farshad Tafazzoli, Chief Information Officer at TouchSuite. "What we've done is we've aggregated this exchange that lets customers of merchants using our POS to present a Macy's, Starbucks or Wal-Mart gift card, and we've developed a mechanism that converts it to cash to spend on whatever goods and services are purchased at respective merchants."

Obviously, some cards are worth more than others, and values constantly fluctuate. "These numbers change dynamically based on what's issued and outstanding," Tafazzoli said. "Literally, within that one second of submitting that gift card, we're going out, validating the value, coming back with the attached conversion equivalent, and the cashier at that point would ask the consumer if they'd like to proceed with the transaction."

If, for some reason the exchange amount should be less than the purchase total, the merchant would prompt the customer to select another form of payment, such as cash or credit to complete the transaction, he said.

No additional charge for service

TouchSuite designed the exchange to be as frictionless as possible. After a one-time setup that enables automated clearing house (ACH) funds to be directed to the merchant's bank account, the merchant is ready to activate the program. "There is a button in our platform that, just like cash, credit or whatever form of payment you're taking, we have a gift card exchange button," he said. "They simply push it, enter the gift card and it's seamlessly transacted."

Tafazzoli noted that TouchSuite employed a clearing house methodology in creating the exchange platform. Depending on the liquidity value of the card presented, once the card value has been validated and applied to the purchase total, an ACH funds transfer in that amount is then issued to the merchant's account.

One of the benefits of TouchSuite's gift card exchange is that it doesn't charge extra for the service. "Our strategy is you buy the product today and it only keeps getting better and better tomorrow, and you're not paying for it," Tafazzoli said, adding that the new exchange is now under patent attorney review.

According to TouchSuite, agents and ISOs have been supportive of the exchange because it opens revenue possibilities for merchant clients. "You tell a merchant that you can accept a Macy's or Target gift card, and you get somebody that essentially walks in – with no cash, or doesn't want to spend any money – with this stored value that's been sitting in their wallet that is all of a sudden worth something – they're ecstatic," Tafazzoli noted.

Blackhawk also expanding services

Long-time prepaid card and network provider Blackhawk Network Inc. recently entered the gift card exchange foray. Through Blackhawk, consumers can now instantly sell a variety of unused physical or digital branded gift cards on its platform.

With the Blackhawk GoWallet mobile app the exchange amount is loaded as a GiftCardMall.com e-gift, which can then be used to buy a preferred card. Blackhawk plans to add more payout options in the future. Right now, users can scan gift cards directly into Blackhawk's wallet platform using a smartphone camera.

"Our digital services platform provides consumers an elegant way to input, manage, redeem and exchange gift cards," stated Tomas Campos, Blackhawk Network General Manager, Digital & Emerging Services. He added that the program creates new opportunities for partners using its digital services application programming interfaces.

All told, gift card exchanges are offering consumers and merchants more options than ever before.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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Spotlight Innovators:

North American Bancard | Harbortouch | USAePay | IRISCRM.COM | Humboldt Merchant Services