George Bousis, Raise’s founder, said in a Forbes article that it is a $400 billion industry in the US alone. Still, waste is rampant. “20% of cards go unused every year,” says Bousis. “You have $80 billion of unused currency—that’s a ton of opportunity.”
Raise, the Chicago-based gift card marketplace, allows customers to buy and sell unused gift cards for less than their cash value and lets buyers transfer the money to a mobile device.
Customers can sell gift cards at a discount price to those who need it. It provides a mobile platform which gives buyers the facility to need not to wait to receive their gift cards in the mail.
In 2013, to grab a big pie of this flourishing market, Bousis built a market for sellers to unload unused cards to buyers who get them at a discount. For this service, the company takes 15% of the sale price of the card from the sellers. In 2014, the company sold more than 1 million gift cards from multiple retailers.
Raise can help retailers too by acting as a powerful tool to build loyalty. Raise can work as an intermediary between brands and customers to create a strong relationship between them.
CardCash is one of the leading online marketplaces for buying and selling gift cards. The process is easy to understand. Customers who have, for example, a $100 gift card that they don’t need, can go to the site and input their card information. Then the company provides them with a quote. If they agree with the quote, they are provided with two options: either to mail in the card or process the sale digitally. The company offers four types of payment: PayPal deposit, Amazon gift card, ACH deposit or check. Once all the information is checked after receiving the card, the company issues the payment to the customer. The card is then listed on the company’s site at a listed price for sale.
CardCash’s business model: The company makes money between what they pay for the card and what they sell for it, minus all company’s expenses related the transaction process.
CardCash Vs. Raise: Business model
The business model of Raise is much like CardCash. Both provide the platform where users can buy and sell gift cards. One major difference is that in Raise’s case, buyers and sellers interact directly. In CardCash’s case, the company buys and sells the gift cards on its own. For example, if someone has a $100 gift card that they don’t need, he/she can sell it on Raise or to CardCash for, say, $92. In turn, they sell it for $96 to someone who needs a card like that.