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Pre-Paid card biz idea: Let’s collaborate!

RichRich administrator Posts: 582 Site Admin
A recent StartupNation visitor named Karel emailed me this idea and I think it`s really cool:"So the idea is... what if i could consolidate the debit balances on my gift
cards into a single debit and pass that payment up to vendors to be deducted
from online order or just refunded to me via Paypal.  Of course, I would be
willing to pay a small fee, maybe 2 or 3 percent or possibly more (but
definately less than what AMEX or VISA might charge to liquidate the cards)."karel goes on to say,I`m an idea person; an accounting person; sometimes a catalyst.  But I`m also
happy working in Corporate America, so I`m happy to pass my ideas along to
people who can possibly capitalize on the idea.  All I ask in return is that
whoever accepts my idea will make money, spend money, and maybe hire employees.
 Use my idea to contribute to the economy. She complains about how each of her gift cards have a remaining balance and she ends up wasting those small amounts.I know this is kind of a niche idea.  But if there is a company who already has
the Web knowledge, and knows how to market this idea (since marketing will be
the key), then maybe some company can tap the potential thousands or millions of
dollars that are being surrendered to AMEX, VISA, and Mastercard, simply because
it costs too much to get gift cards and prepaid credit card balances refunded
and the remaining balances are so minimal that the remaining funds are hard to
use. Maybe you know a entrepreneur who can consider this idea.   Do I ever! And not just one entrepreneur, but THOUSANDS. RIGHT HERE.So the question is, do any of you like this idea? And does someone want to step up and make this happen in a collaborative mode with other SUN community members?


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    omupasomupas subscriber Posts: 7
    This would be a very difficult task to accomplish.  Gift cards aren`t as simple as Visa/MC, Amex, Discover, etc.  Each gift card program is run by one of a multitude of gift card providers i.e. Valutec, Tendercard, JT Loyalty, etc. totally separate from Visa/MC, Amex or Discover.  These gift card providers do not interact with one another.  So if I had a gift card from ABC Gift Shop and one from XYZ Boutique and another from AAA Salon, they could all be from different gift card providers and run completely independent of each other.
    It would seem to be a nearly impossible task, unless you were consolidating like gift cards from the same company only.
    Hope this makes sense.omupas2007-3-27 16:7:58
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    RumpelstiltskinRumpelstiltskin subscriber Posts: 1
    I think it`s a great idea.  As far as a total collaboration with all vendors, and banking entities. It`s only a matter of time before ALL MUST get on board to survive. It`s not unlike paypal, or any other business that pioneers a winner. Either get with the PROGRAM (paypal, Music downloads...etc), or lose sales opportunities.
    Aside from the logistics of launching - It`s a winner! Not to forget a big hit against THE MAN! Yeah! Gift-card anarchy... Revolt!...Revolt!
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    RichRich administrator Posts: 582 Site Admin

    Isn`t the idea not to make all of the gift card companies work with each
    other, but to have them work with the proposed consolidation company?

    Example, someone has figured out a system where one can earn airline
    miles from purchases and use those miles with various competing
    airlines. Those airlines have a deal with the credit card, not with each

    you`re right on, campsteve! i smell exactly that opportunity - the site that brings those providers together AND salvages consumers` remaining dollars leftover on multiple gift cards
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    RumpelstiltskinRumpelstiltskin subscriber Posts: 1
    That was my point! For ALL to HONOR the NEW "Good to the last drop" gift cards. No matter what company it came from.
    "Giving it to the MAN referred to no longer "throwing away your money"- purely out of inconvenience.  I.e., a Border`s books card can be "drained" (accepted) anywhere. Afterall, no one has to buy "gesture cards" (Border`s, etc). All banks offer debit "gift cards", which can be used anywhere!
    Simply have a "universal mark" on the new cards. Which would indicate it`s compliance with the PROGRAM.Rumpelstiltskin2007-3-27 18:30:19
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    RumpelstiltskinRumpelstiltskin subscriber Posts: 1
    Yeah, but if something like this were implemented, they would not have any "gift card" business - period!  (If they don`t comply). Never mind what`s left-over, and who gets it! 
    If this were implemented. Who would buy a gift card ("gesture" debit card) that doesn`t offer the "accepted anywhere symbol". Remember, the "gesture cards" are only differentiated from "universal" debit cards in two ways: 1. They are not "universally accepted" by other vendors. 2. They are "inconvenient". Where are the positives?  A pretty logo only goes so far.
    Where is CraigL (beef up the servers).Rumpelstiltskin2007-3-27 20:0:19
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    RumpelstiltskinRumpelstiltskin subscriber Posts: 1
    Lets say I have 5 different gift cards with small amounts on them totaling $10. What if I could redeem them all at the consolidation company for $10 credit in a new gift card of my choice? I`m not sure how the company would make money. Or why retailers would give up dollars to someone else, but there has to be some sort of incentive. Let`s think here people!
    Nothing will change, they will simply be more convenient. It`s a perfect example of "what goes around - comes around".
    The incentive is:  They get to keep selling gift cards.  Retailers will not allow such a program to last, i.e., they will implement a program that allows ALL gift cards to be redeemed anywhere, via a cooperative database". There will be no opportunity for any ONE service/clearinghouse. Which is what you are proposing.
    Don`t forget gift-cards are debit-cards with a gesture that says: "I know what you like". (just like a greeting card is a gesture). Therefore, people will always buy them. The only difference is (in the beginning), people will only buy those that participate (in this proposed service). Once ALL VENDORS participate in a universal program  - ALL IS EQUALL AGAIN!  With the exception of a more versatile "gift-card". There will be no downside for any issuer. Because they will all be honoring each others cards - "what goes around....comes around".
    The New cards (program) will render all gifts cards to be mere advertisement & gesture...all is well. Which is really all they EVER WERE! An inconvenient draw/advertisement.  Remember, all banks offer "pre-paid" debit cards to be used for gifts. The gift-card  issuers;  however,  will not allow themselves to be considered INCONVENIENT as a result of this proposed (specialized) service. Not for long anyway.
    Therefore, no such "service alone" can survive for long. All card issuers will (eventually) render their cards transferable to all retail outlets. This would make them more convenient (useful) than any one website/service does. All is equalized in short order. A fancy debit-card with  brand/store advertisement.
     Rumpelstiltskin2007-3-28 1:3:13
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    VirtecomVirtecom subscriber Posts: 1
    Here`s your solution! In Florida everyday there are thousands of 2 & 3 Day Passes to various amusement parks available. Most go unused and get trashed but many end up at resellers. The key is to get enough card value to purchase what you want or need. Otherwise it is not doable. Gift cards are designed to help retailers not avg. Joe
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    RumpelstiltskinRumpelstiltskin subscriber Posts: 1
    All I was saying ( in a convoluted way)  is that "IF" such a proposed service were to gain ground (popularity), "retailers" will pull the rug out from under it. It is my feeling that they (retailers) will not want to be considered "inconvenient" . And , as a result, they will revert to minimizing/rendering "gift cards" to a mere advertising method/object. I.e., a "debit card with a FACE!"
    A Better Idea? Why not create a company that sells UNIVERSALLY ACCEPTED "debits cads" with retail advertisements on them. The revenue would be created through "advertising fees" (say 10 cents/card). This would kill two birds with one stone.  As I`ve said, this is the only reason why "consumers"  buy them in the first place (see: greeting cards/gesture).
    Heck! Why not just sell greeting cards with  "built-in-cash"!(credit) Open the new "greeting-card" and wala! $10.00`s of spending convenience? It`s the same principle - no?Rumpelstiltskin2007-3-31 7:44:46
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    KarelGKarelG subscriber Posts: 4
    Rich and Jeff,
    Thanks for posting my idea.  Hopefully, if nothing else, it will encourage everyone to think creatively.
    My idea is specifically related to AMEX, VISA, and Mastercard pre-paid gift cards; not to retail store gift cards.  So I don`t think the retailer of the card would prevent any company from accessing the funds.
    My idea is to ask card holders to give their card numbers to "the company" and then the company gathers the funds and passes the credit onto a group of vendors.   Or essentially, "Hey Mr. Concierge, I have many forms of payments, but none of them are worth very much.  Can you help me spend the money?".
    You would be surprised how hard it is to spend exactly $100.  Unless you buy something valued at more than $100.  But I suspect most people who get gift cards or who buy gift cards only spend less than the value of the gift card.  So what do they do with the left-over $2.35 or $1.99 or whatever amount?.
    Do you know how difficult it is to find a retailer who accepts multiple forms of payment?  Especially many forms of payment.  At one time, I had about 12 pre-paid cards that had balances for about $5.00 each.  The card balances started to expire and I lost money.  That`s why I think there needs to be a way to consolidate the pre-paid balances into one form of payment and spend it online.  This isn`t a "Business" idea.  It is a business product idea.  This idea would work best for someone who already has an online business.
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    KarelGKarelG subscriber Posts: 4
    My sister works for a national retailer and she has told me that their cashiers are not supposed to accept multiple forms of payment, unless it is cash and one credit/debit card.  The reason is that accepting multiple credit cards increases the company`s expenses and decreases cashier efficiency. (Efficiency vs customer service; it`s a delicate balance).  Hmmm, I suppose I could go use a self service check out and maybe the computer wouldn`t fuss so much as the people).
    In my experience, when I`ve tried to use an AMEX gift card at a brick & mortar store, I had to tell the cashier how to input the gift card information into the cash register.  (FYI, it is entered just like a credit card).
    Still though, I think it would be easier to just go online, enter my gift card numbers into a web page, have the web site determine the balances on the gift cards and debit the cards for those balances, then sum the balances into an temporary account, and then allow me to pick a vendor where I can spend the account value (minus a 5% fee).
    The problem with this idea is the marketing.  That is why I don`t think this idea is sufficient to form a business.  But, if your business sells the gift card, then this is a good back door idea to add to your suite of services.
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