Don’t Pass on Gift Cards, There is a Digital Solution
Gift cards can often feel like the greatest solution to gifting needs and yet an unmanageable gift for people to receive. We lose cards, forget about them, and often don’t end up using them. The industry refers to this as “breakage” which essentially means this is free money to retailers. Over the past few years, state governments have caught on to the more than $3 billion in unused gift cards each year that mainly large-scale retailers benefit from. As a result forty-three states now have unclaimed property laws that cover gift cards, meaning that after a dormancy period, unspent gift card funds may actually go back to the state.
GiftPass is an app that solves both the retailer and consumer challenges for gift cards by allowing you to upload your gift cards to your account and utilize them both in-store and online via their App. No more lost cards. Digitizing the gift card process and experience seemed like an obvious idea to GiftPass founder Maliha Naeem who wanted to solve her own personal challenge with using gift cards. She said, “Gift cards are the third largest form of payment at point-of-sale in the U.S. All forms of payments are going mobily digital. It only makes sense that gift cards were next.”
Over $200 billion worth of gift cards are sold annually but they behave differently than other forms of plastic payment as they are single-use. That’s a lot of plastic going into landfills. Close to 80% of gift cards in the U.S. are currently physical plastic cards. This number is expected to flip by 2027 with companies like GiftPass leading the way. Additionally, the digitization of gift cards solves a supply issue. Every year retail giants and banks lose out on holiday sales as physical gift cards sell out due to lack of supply.
The GiftPass digital central repository for purchasing, gifting, and managing gift cards increases sales opportunities, makes the consumer experience much more tenable, and means that more gift cards are actually being used. For retailers, GiftPass solves another problem, data. Until now, data capture on card purchasers and users was non-existant. GiftPass is able to send reminders, generate prompts and even use geolocation to encourage gift card sales and usage. This is crucial for big retailers who rely on annual revenue from gift card sales.
For small businesses that make up 90% of the U.S. economy, GiftPass provides a much needed solution, making it possible for many small businesses to offer gift cards outside of their own retail space for the first time. Historically, gift cards have been something only big retailers have been able to master due to the challenges of printing, distribution and tracking.
GiftPass was launched in 2022 and is preparing to release it’s next iteration of the app and platform to take advantage of the booming digital gift card industry, currently growing at 20% CAGR. GiftPass is the winner of The Fourth Floor (Soon To Be The Fourth Effect) recent pitch competition. This recent competition was judged by guest judges, Tahira Dosani of ResilienceVC and Kange Kaneene of SAP.iO. Accredited investors interested in this investment opportunity can find out more by joining The Fourth Floor’s Back Room, their private investment club where women can network and invest in each other. Women and BIPOC founders currently raising a seed round are eligible to apply for the competition.
A strategic partner to our Women & Worth community, The Fourth Floor is on a mission to close the gender power, wealth, and funding gap by advancing for-profit board careers for women, supporting women-led startups and funds, and providing women opportunities to invest in other women. Women & Worth members and The Fourth Floor members receive discounted membership rates to each other’s organizations. To find out more visit us online.