

CardPool (YC W10) Wants To Buy And Sell Your Unused Gift Cards - anson
http://techcrunch.com/2010/02/18/cardpool-wants-to-buy-and-sell-your-unused-gift-cards/

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leelin
Eventually you can sell CardPool gift cards... a universal currency for other
gift cards. Then you've begun the great backdoor attack on Paypal!

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andrewljohnson
This is by far one of the best YC ideas I've heard in a long time!

If you succeed, you're going to destroy balance sheets, move markets, and
hopefully reform the gift card scam forever. But, you probably already know
all this.

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kpanghmc
It's certainly a good idea, but they're not the first to come up with it.
Plasticjungle.com seems to have been around since 2006 and looks very similar.
A quick Google search for "sell gift cards" reveals several other similar
sites as well.

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david927
I pretty sure he was being sarcastic.

YC has always had a penchant for poppy, Hanson-esque startups, but this one is
flat-out embarrassing. They turned down CouchDB but picked up a gift card
exchange? When did Dr. Paul Graham, author of On Lisp, turn into pg?

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joshu
You seem to assume, as a foregone conclusion, that CouchDB is a good
investment.

Can you explain why?

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david927
First, for this gift card thing, where is distribution and SOM? Those are
cornerstones and as my Mama always said, "Bridges without cornerstones are
fally." I'm not saying the guys behind it have done something wrong. Their
mandate is "pay the bills and buy a lottery ticket at the same time." I hope
it works out for them.

But you didn't ask about that. You asked, "What makes CouchDB a better
investment?" Well, it's technology. And even if it doesn't get the business
case, it can lend a role in someone else's business case. You've advanced the
world a little bit. You've fought the good fight.

I mentioned Hanson. What if a record company, founded by good musicians, had
Hanson and Glenn Gould sitting on their couch and said, "Sure Gould is
amazing, but will teenagers buy it? Let's fund those Hanson boys." You would
question their intentions and if they really ever understood music. You would
be embarrassed for them. You can't always fund the Goulds of the world, but
there's a level of superficiality that you can always rise above.

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jadence
What stops a scammer from writing down the relevant card numbers, selling the
card to CardPool (or any competitor), and then still using the card after
receiving payment?

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anson
First and foremost, our customers are always protected by this since we take
on 100% of the risk associated with any transaction and we guarantee its full
value.

Second, to protect ourselves, we've developed several methods of detecting
high-risk transactions and ways to mitigate them (such as working with
merchants to reissue new gift cards). I'd go into more detail, but we don't
want the wrong people to get ahold of this information ;).

In the end though, we'll be fine. The fact that we mail the check to a
physical address, make out the check to the seller's name, and the seller has
to cash the check at a real bank, is already a big deterrent to bad behavior.
These bad people will have an easier time trading their fake gift cards to
people on sites like craigslist.

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seanos
"There have been a number of auction-like marketplaces, such as Plastic Jungle
and Rackup, that have popped up to allow users can buy and sell their gift
cards to each other..."

"...CardPool is entering the space but with a slightly different twist to its
model. Card Pool allows users to both buy and sell gift cards."

What is the twist?

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Retric
They set the buy and sell price, so there is no auction component.

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tesseract
Having a disinterested party set the prices seems unlikely to work
(sustainably/scale-ably). A bid/ask system (like the stock market) seems like
a decent model, although it might be difficult to present in a way that is
easy for most users to understand.

Just like in the real markets there would room for a market-maker to make
money on the bid-ask spread, while providing liquidity... if the service had
an API, this could be a third party, although the more obvious scenario is
that CardPool itself would be the market maker.

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pbhjpbhj
None of the parties is disinterested.

If I purchase £50 GBP giftcard, then my friend wants to swap that in for 80%
of the value, they get £40 to spend elsewhere. Now if CardPool sell the card
back to the company for £45 they're both splitting the remaining £10. CardPool
don't need the customer buyers in order to buy cards. They could presumably
also deal with the companies to buy cards direct at a discount (as if they
were an affiliate).

CardPool then have a few options. If they lower the swap value of company A
then I'm more likely to use my money there. This can actually be bad for
company A as whilst they can negotiate a potentially larger amount of the
difference of a buy-back they also risk the customer keeping the card and
actually using it. Which is a transactional loss for them but a potential win
if they can gain repeat custom.

It's really quite interesting to consider the back room deals that might go on
over this.

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physcab
Are there any companies/non-profits/charities that would allow me to donate my
gift cards that have a small balance on them but not enough to buy a product?
Ideally I'd like to give this money to charity instead of throwing them away.

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anson
we will be adding this feature very soon!

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andrewhyde
great news, I've wanted to give the 'if you don't use this the balance goes to
charity' card for a while.

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jadence
If you can create arbitrage situations for customers you can generate a decent
amount of buzz in certain circles. Off the top of my head one way to do it is
to offer to buy gift cards for more than 95% of their value. Some people have
credit cards that give them back 5% on grocery store purchases and many
grocery stores sell gift cards. If the folks on FatWallet Finance
(<http://www.fatwallet.com/forums/finance>) get wind of it (heck, post it
yourself) they'll jump all over it and you've got immediate exposure to
hundreds of people. I would set limits though and do it only sporadically lest
you end up w/ a huge surplus of gift cards that may take you a while to sell.

To get a sense for the kind of exposure you can get here's a thread from
another arbitrage situation (buy dollar coins from the US government at face
value, collect credit card rewards/cash back, deposit coins into bank
account). These guys went nuts and the US Mint policies were actually changed
to combat it. There's an article somewhere from a press conference where the
US Mint publicly addressed it but I'm too lazy to dig it up right now.
<http://www.fatwallet.com/forums/finance/837472>

Also, on occasion people post in the forums questions like "How can I turn $X
credit limit into cash." Set up relevant topic alerts
(<http://www.fatwallet.com/forums/alerts.php>) and respond by letting them
know they can buy gift cards and then convert them into cash on your site.

I'm a regular in that forum so let me know (contact info in profile) if you
want any guidance in posting to FatWallet Finance.

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milestinsley
What a great idea! Who hasn't got an unused gift card lying around somewhere!?

Although, it would be awesome if they offered digital delivery of gift cards
that can be redeemed online in addition to delivery of physical cards.

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justin
Anson, you should have gone with cardly.com.... what were you thinking!!

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luxiou
Congrats guys! I might use my borders card this weekend :)

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sachin
Ditto, congrats guys! The service is looking good.

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theycallmemorty
Am I the only one who saw the title and thought it was a stupid idea... then
realized we aren't talking about Hallmark-style Gift Cards?

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vegashacker
I think of the Hallmark things as "greeting cards", not "gift cards".

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tlrobinson
I'm curious about the decision to put a phone number on the site. Do you
answer it personally? Is it worth it?

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browser411
It may be out of necessity. Many merchant gateways that sites use to process
credit cards require phone numbers to be published.

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smokey_the_bear
I've often wondered if stores could make money selling discounted gift
certificates with a time delay. It's 5% off, but not useable until 2 months
after purchase. It'd probably be a hassle to handle, but I'd actually consider
using gift certificates if they had something like that.

~~~
leelin
Very interesting, if you are familiar with the "Gold Pass" vs "Silver Pass"
movie gift cards, there is a tiny subset of your idea built in there. The idea
is Silver passes are cheaper than Gold passes, but you can only watch movies
that are a bit dated, I think at least 10 days from release date.

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jadence
Is there a way to view all the merchants you accept and what you percent you
pay for them? I'm guessing the value depends on not just the merchant but also
the value of the card and the expiration date so it may not be possible to
just have a simple list view.

I ask because I'd like to refer you to a friend who has a boatload of credit
card rewards points she needs to use and can get gift cards for the rewards
points. If she could immediately see which merchant cards will give her the
highest return it'd be a lot easier than tediously selecting each merchant and
clicking "get offer."

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jmtame
i was a bit skeptical, then i checked my wallet and realized i had 2 gift
cards i couldn't really use. i will be mailing those to cardpool tomorrow.

i didn't understand how this worked at first, here's a quick summary:

1) you look up the value of your cards online 2) you mail the cards to them 3)
they mail you a check for the value (minus 10%)

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arihelgason
Great! Especially like being able to buy a gift card to get a discount on a
purchase I was going to make anyway.

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coryl
Technically aren't gift cards non-transferable?

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Batsu
Considering they are gifts, I'd hope not ;)

However, since they are gifts, you can always argue it was given to you.

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gustaf
Great. Looking forward to playing with this!

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alexkay
Nice idea! Would be great if you mention that the service is US-only; you are
not using a country-specific TLD, so it's not obvious.

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PanMan
Most .com's are US based, and a lot of them don't deliver outside the US.
While I agree that's not ideal, it's hardly a surprise. I do agree more
services should work international: There's a lot more foreigners than people
in the US :).

