With the $1.128 trillion gift card market set to quadruple within the next 8 years, learning how to become a gift card reseller is one way to profit from this booming market.
Gift card resellers add value to the gift card value chain by stocking gift cards from many retailers (issuers) and selling them to end users who often need a variety of gift cards from different retailers.
They also provide customization, fulfillment, and reporting services that make it easy to create and implement employee reward programs, research or survey rewards programs, and customer reward programs, among others.
New gift card reselling businesses have been started while many existing businesses (especially e-commerce platforms) have added it as a new revenue stream.
Like every other business, succeeding as a gift card reseller requires adequate knowledge of best practices and how you can gain a competitive advantage over competitors.
In this article, we will teach you how to make money reselling gift cards by considering 9 best practices or success strategies.
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1. Provide customization options
While gift cards are valuable in themselves, they can become even more valuable when they are accompanied by thoughtful and personalized messages or captions.
Consider a company rewarding all their employees with a $10 gift card on Employee Appreciation Day. Imagine how happy employees would be if the gift card came with a message like: “We appreciate the work you have been doing for this company over the years. We will not be where we are without you. Thank you for your service.”
For some employees, the thoughtfulness behind such messages may even be more impactful than the gift card itself. Such messages can improve employee retention as they feel wanted and loved.
As a gift card reseller, you must provide opportunities for customers to customize their gift cards with such personalized messages. This is especially important with digital gift cards since they provide more opportunities for customized messages, unlike physical cards.
Below is an example where buyers can add a personalized message to a “Happy Birthday” gift card:
Source: WooCommerce
You can even go further than this.
In addition to specific messages, you can allow customers to customize gift cards with their own brand identities (brand name and logo, for example). Such branded gift cards are known as white-label gift cards.
Adding these brand identities reinforces to the recipients that they are receiving the gift courtesy of the company. “This is not just a gift card from Target, it is a Target gift card provided by XYZ.” Again, this is often easier to do with digital gift cards.
Open-loop gift cards (whether Visa or Mastercard) are often the most customizable since they do not carry the name of any specific retailer to begin with.
2. Offer different types of gift cards from different retailers
As said in the introduction, the primary value that a gift card reseller provides is the stocking of diverse gift cards from various retailers. Consequently, success in this business requires that you have a wide reach.
By all means, ensure you have the most popular gift cards (like Target, Walmart, Sephora, eBay, and Amazon gift cards) in store. But you can’t stop there. Some people value iTunes, Spotify, or Xbox gift cards more than the popular ones.
Source: LinkedIn
Consider a company trying to encourage its staff to read more. They can do this by gifting all of them with gift cards from the local bookshop. When they turn to you as a reseller will they find such gift cards in store?
Of course, you can’t stock every gift card possible. Nevertheless, you must be aware of the needs of your target audience and provide different gift cards that will meet those needs. Said differently, you need access to many brands.
Similarly, there are times when customers prefer open-loop gift cards that recipients can use anywhere. This is useful when it is hard to predict what recipients will find valuable. Therefore, while you are stocking closed-loop gift cards from many retailers, ensure you also have enough open-loop gift cards.
3. Negotiate better rates with retailers
The gift card reselling business model depends on you purchasing gift cards at an average price that is lower than the actual value of the card.
Getting better (cheaper) rates from retailers allows you to do two things.
First, you can sell your gift cards at a lower price to increase your market share; the lower the price, the higher the demand.
Second, you can sell at the same price as competitors while making more profits.
Negotiation is all about give and take. To get better rates, you must also offer retailers some value. This might be buying in large quantities, stocking less popular but saleable gift cards, or purchasing more frequently (due to lower inventory days), among others.
4. Provide value-added services
Fulfillment and reporting are two value-added services that can easily set you apart from other gift card resellers.
Fulfillment means undertaking the delivery of gift cards to recipients. Digital or egift cards are often delivered by text message or email while physical gift cards are delivered to a physical address.
Many gift card resellers will offer the delivery of digital gift cards so you can set yourself apart by also delivering physical gift cards.
A survey by Fiserv, a fintech company, has found that there is a 50:50 split among consumers in terms of preference for physical or gift cards. Tangibility is the primary reason why some consumers still prefer physical cards even in today’s digital age.
If half of your customers still care about physical gift cards, then your fulfillment services should extend to them. You will be surprised at how many of your customers will be willing to pay a premium (a higher price) to have the hassle of delivery lifted from their shoulders.
Reporting is the second value-added service of interest. Organizations creating customer loyalty, employee rewards, and research and survey reward programs need data to gain insights into the performance of their programs. Providing such data is another way to stand above the pack.
5. Verify gift cards before listing them
Can you imagine anything more frustrating than your customer receiving a complaint from a gift card recipient that the card is invalid?
Whatever might be the cause of the problem such a situation can kill customer confidence and cause you to lose them. It might even have ripple effects that might threaten the existence of your business.
As they say, prevention is better than cure. So, before reselling gift cards, you need to have a mechanism to verify that the cards are still valid before listing them on your online store.
WikiHow has a step-by-step guide on how you can do this.
However long it takes and whatever it costs, you must not overlook such a process. Integrity is everything in business and no price is too big to pay for it.
You can also protect yourself by ensuring that you only work with reputable retailers. While it is essential to have a wide variety of gift card options on offer, don’t risk working with businesses you can’t trust.
6. Be visible
If you are an e-commerce business and have just begun to resell gift cards, there is a temptation to hide the fact that you sell gift cards somewhere on your site.
That’s a mistake. If you aren’t promoting your business, no one will do it for you.
The newest business is the one often in need of the biggest marketing. Design your website in such a way that your gift card reselling business is visible.
Whether gift card reselling is your main or side business, you still need to promote it. Be visible on social media channels, have a landing page that is accessible on your website’s homepage, and join conversations about the industry by producing and interacting with content.
While there are strategies that will help you find customers (see below), you should also not ignore positioning yourself to be found – what marketers call inbound marketing.
7. Use exciting offers to win new customers
If you resell gift cards as an additional service, your main customers are the first audience you should target. You can send a series of promotional emails to acquaint them with your new business.
Beyond this, you can target new customers through paid advertising on Facebook or Google. If you go through this route, then you must have exciting offers that will interest your audience – discounts, free delivery, giveaways, etc.
If your inbound marketing is good, then you should have a ready audience on social media plus an email list on your website. You can also create exciting promotional offers for these audiences.
8. Reward existing customers
According to Outbound Engine, a marketing firm:
- It costs 5X more to acquire a new customer than to keep an old one
- Improving customer retention by 5% can increase profit by 25%-95%.
- The chance of success marketing to old customers is 60%-70% while it is between 5% and 20% with new potential customers.
Added together, these stats have at least one implication: gift card resellers can increase gift card sales by prioritizing customer retention.
While other businesses are focusing on how to win new clients, you should also consider how to keep and upsell the ones you have.
You can do this with customer loyalty offers that reward your existing customers with discounts and other promotional offers (buy 50 get 5 free, for example). Those offers can be made on holidays or special days designed for customers’ appreciation.
A referral program is another option. You can give your customers free gift cards or a discounted price on their next purchase when they refer you to others.
Finally, you can create special offers for dormant customers. Dormancy might mean they have found a reseller who offers better terms or has given up on their gift card programs. If the former, you can send exciting offers, and if the latter, you can create a series of emails reminding them of the growing importance of gift cards as rewards for employees (to raise morale), customers (to improve retention), and survey respondents (to enhance participation).
An iteration of this is a cart abandonment campaign. You can send promotional offers to customers who abandon the checkout process encouraging them to complete the purchase.
9. Consider purchasing and reselling unused gift cards
Not everyone who receives a gift card uses them. About 51% of US consumers have unused gift cards and 3% of gift card value in the US (valued at $3 billion) goes unused every year, according to Gitnux, a market research firm.
Interestingly, many holders of unused gift cards are willing to sell them at a discount on the face value and many gift card exchanges are taking advantage of this opportunity.
Who is in a better position to benefit from this than a gift card reseller?
You can buy these unused gift cards at a lower average price than what retailers will give you even for your bulk purchases. In essence, it is an opportunity to lower your cost and increase your profit.
Digital cards are especially appealing in this regard. There is nothing like an old or new digital gift card and you can sell an unused gift card for the same price that you will sell the one you just bought from a retailer.
Things might be less straightforward with physical gift cards since one can differentiate between old and new ones. Yet, you can choose to sell the old ones for a slightly lower price and still make profits on them.
The opportunities are endless if you can add this feature to your existing gift card reselling business.
However, you need to remember to verify that the cards are truly unused to avoid gift card scams. Similarly, check the expiration dates and ensure you only buy cards that are not close to expiring.
How to become a gift card reseller in one day
What if you can start your gift card reselling business in just a day? Too good to be true?
Not really!
You can integrate the Reloadly Gift Card API into your website and apps in just a day with little to no developer knowledge.
With Reloadly, you will get access to more than 14,000 gift cards from more than 300 brands. What is more? You can deliver digital gift cards to recipients across the globe in just 5 seconds.
The platform supports more than 100 currencies so your customers can reward customers, employees, and respondents in various countries. You can also integrate with Stripe or Paypal to accept debit cards and credit card payments (among other payment methods).
Furthermore, your customers will get reports that will help them improve their reward programs and get better value for money.
And if you need any help, we have a 24/7 customer service team that will solve your problems and answer your questions.
Reloadly does not just help you become a gift card reseller, it gives you a lot of features and tools that will help you succeed.
[Do you want to make money reselling gift cards? Sign up for Reloadly to get started in one day with all the tools you need to succeed.]
Takeaways
- Gift card purchase is now a popular way for organizations to reward employees, customers, and survey respondents.
- To succeed as a gift card reseller, you must stock a wide variety of gift cards, provide customization options, and offer various value-added services.
- Successful gift card reselling also requires that you be visible, win new customers, and retain existing ones with various promotional offers.
- To enhance your integrity, ensure you verify gift cards before selling them.
- You can also access cost-effective gift cards by buying unwanted gift cards at a discount.
