At least $8 billion of unused gift cards went to waste. During the weekend football match there was a televised offer on unused or unwanted gift cards, offering cash in return for these cards.
The typical offers made in the secondary market for unused or unwanted cards are for approximately 60% of the initial value. Here the customers who are in possession of these cards can decide whether they want to mail them or retain them. However at CardWoo things are different. Launched in July 2010 by Cash4Gold, a mail-in reseller of gold, customers will have to send in their gift cards and then the company issues a check that they think is fair. Customers have no knowledge how much they should expect, if they are not satisfied with the amount they received they do have the option of returning the check within 14 days, and the cards would be returned.
The business model is similar to that of its sister concern but the customers are a bit nervous about sending in their cards and then waiting on the company`s discretion. This is something that has not gone down to well with customers, as one should be wary of someone who does not say how much money you can expect. In a test by SmartMoney.com it was found that CardWoo`s offers were much lower than its competitors.
However, CardWoo`s, CEO, Harry Rosenfeld, states that the company uses this mail-in model, instead of upfront offers. The value of these cards keeps changing daily, which solely depends on how much an individual is willing to pay for the card. Here the gift cards are resold to customers who wish to buy these cards at a discounted price. Customers who hold these unused cards are sometimes unsure about how much is left on these cards especially if it is partly used. This makes the instant estimation of the value difficult especially when there is no card in hand. Comparisons with other sites and their offers on gift cards might be inaccurate as CardWoo has package insurance as well as tracking which is worth around $3.