Today San Francisco-based Gyft, a gift card management platform, has debuted a new regifting feature in time for the holiday gift rush. According to Ceridian Stored Value Solutions Inc., 82 percent of Americans plan to purchase gift cards during the upcoming holiday season, and Gyft is trying to provide an option for people who receive gift cards they don’t want or won’t use.
Gyft launched its iPhone app at the TechCrunch Disrupt conference in September, and at the same time announced $1.2 million in funding from Google Ventures, 500 Startups, and several other investors. The platform lets users buy, store, and send gift cards, either by entering in physical gift cards, or buying digital gift cards from retailers including Sephora, Lowe’s, and Gap. In the first month after launch, the company hit $1 million in uploaded gift cards, though it’s not disclosing how many cards have been sold through the platform.
Now in addition to purchasing gift cards for other people, users can regift their gift cards to others with the new Gyft It feature. Existing Gyft users can send their unused cards via email, SMS, or Facebook. And unlike traditional regifting, which can come with a stigma if the recipient knows the gift wasn’t originally intended for them, regifting a card on Gyft doesn’t give any indication the card is being repurposed. The recipient doesn’t need to be a Gyft member to use the card, and can redeem it in-store or online, either by scanning a barcode in the iPhone app, or giving the cashier a numerical code to enter.
Founder CJ MacDonald said the regifting feature is designed for people who don’t want to regift a physical gift card that might be “beat up or written on.” “The average person has 4-6 gift cards, and I can’t tell you how many gift cards I’ve had lying around my house for year, and I’ve got cards that I will probably never use,” he said in an interview. “The cool thing about what we’re doing is gift cards are really just a code tied to a dollar amount, so it’s digital currency in our application, and if I have a $50 Macy’s card that I’m not going to use, [I have] the ability to just send that to someone else.”
Right now Gyft has partnered with around 200 retailers, and takes 8-10 percent of any gift card sold through the app. The app also offers analytics tools to retailers, who can track redemptions, outstanding gift cards, and send out discounts to incentivize shoppers to redeem their gift cards. MacDonald said since launching they’ve been focused on adding support for the iPhone 5, as well as integrating with Apple Passbook, though he said they will focus on bringing new retailers on board in 2013.
Gifting startups are gearing up for the holiday season, with companies like personalized catalog tool Wantful and Facebook gifting app Wrapp hoping shoppers will look to online tools to cross items off their shopping list. Facebook’s new Gifts feature, only in testing certain markets right now, will likely be the biggest competition for gifting startups, though it focuses on physical goods rather than gift cards. For users looking to unload their unused gift cards, there are already platforms like Cardpool, which lets people trade or sell their gift cards, which might be preferable for those looking to pocket the gift card’s value rather than forwarding it on to a new recipient.
MacDonald said since Facebook Gifts is focused on physical gifts, he doesn’t view it as competition. “People are going to buy gift cards, people are going to buy physical goods, we want to be able to provide a better experience for people around buying gift cards, receiving gift cards, and managing gift cards.”
With an Android app launch coming up before the end of 2012, as well as international launches and an API in 2013, Gyft’s traction since launch seems to show that people are looking for a way to store and use their gift cards on their smartphone. If the company can corner the gift card market, and let tools like Wrapp and Facebook Gifts focus on sending virtual and physical goods online, it could find a niche in the reportedly multi-billion dollar gift card market in the U.S.