Unlike existing gift card exchange websites, CardHub.com has created a service that cuts out the middleman. Before this new option debuted this week, you had to work with one of the existing key exchange sites that would buy the card from you for 50% to 90% of the amount left on the card, then turn around and sell it for a profit on their website.
But wouldn't it be better to keep the profit for yourself by cutting out the people in the middle? Odysseas Papadimitriou, CEO and founder of CardHub.com, asked himself that very question and designed the new social network for gift card exchanges to "leverage the power of Facebook, as well as the power of friends and associates," as Papadimitriou told WalletPop in an interview.
The new program allows you to use Facebook's social network to let people know you have a gift card to sell and how much you want for it. (The link to Facebook allowed CardHub to put in some security protections so you know the person is legit.) To use the website, you do need an account on Facebook with more than a few friends; as a security measure, you won't be able to use CardHub if you're new to Facebook.
Prior to the launch of CardHub's option, you could use PlasticJungle, CardPool, SwapaGift and any of about 20 other websites to sell your gift card or buy gift cards online for less than the card's face value. SwapaGift, for instance, offers to buy gift cards at a reduced price based on the popularity of the card, ranging from 70% of the card's remaining value for the most popular stores to 60% for less popular stores.
I took PlasticJungle for a test drive and tried three types of cards out. For a gift card with $100 left on it for craft store Michael's, the website offered $62 cash or a $65.10 Amazon gift card. For a Hardee's card with $25 on it, the website offered me $0, even though it had several similar cards listed for sale at $17. For an Ann Taylor card with $200 left on it, the website offered me $130 or a $136.50 Amazon gift card, but it was selling a $200 Ann Taylor card for $170. So the mark-up for that card was $40. It sure would be nice to actually keep some of that mark-up in my own pocket.
The problem is, I'm still not sure I'd trust a social network as the buyer of a gift card unless I could save a considerable amount of money. The other gift card websites (with middlemen) guarantee the gift card, but a social network could be filled with cards soon to expire or other problems you may not want to worry about.
To alleviate the fear of dealing with a buyer directly, CardHub recommends users take precautions, especially with strangers:
- Meet the seller in person and in public.
- Verify the gift card amount by calling the toll free number on the back of the card.
- Don't wire or use Western Union to send money to strangers.
- If it seems suspicious or too good to be true, report it.
If you have a gift card to sell, it can't hurt to try out the new social network first and see if you can get more for your card. If that doesn't work out, you still have the other gift card exchange sites as a backup.
Lita Epstein has written more than 25 books including The Complete Idiot's Guide to Improving Your Credit Score and The Complete Idiot's Guide to Personal Bankruptcy.