CardCash.com, a secondary gift card exchange, recently closed $6m in growth funding (read here). Jeremy Levi, the Director of Marketing of the Brick, NJ-based company, answered our questions about the company, the platform, the team, the funding and future plans.
FinSMEs: What’s CardCash.com?
Jeremy: CardCash.com is the leading online marketplace for buying and selling gift cards. There is an estimated $40 billion in unused gift cards in the wallets, desk drawers and couch cushions of Americans across the country; we provide a secure marketplace where people can sell us these gift cards and get paid, rather than have them sit around and go to waste.
We then turn around and sell the gift cards to others who are looking for a discount on their favorite merchants. We currently have nearly 300 merchants in stock.
FinSMEs: How does it work?
Jeremy: The process is fairly simple. Customers who for example have a $100 Macy’s gift card that they have no use for, go to our site and input their card information. They are given a quote on how much we would pay them for the card-let’s say $80-and they’re given an option to mail in the card or process the sale digitally. We offer four types of payment: PayPal deposit, Amazon gift card, ACH deposit or check.
Once we receive the card we verify the balance on the card and run all the information through our state-of-the-art fraud detection system. Once everything checks out we issue the payment to the customer.
The card is then listed for sale on our site at a discounted price; the current price for Macy’s is 10% off so our $100 card would sell for $90, giving someone who enjoys shopping in Macy’s a tidy 10% savings on their purchase.
FinSMEs: What’s the business model?
Jeremy: Our profits are in the spread. In the above referenced case we make our money in the 10% difference between what we pay for the card and what we sell it for, minus all of our expenses of course.
FinSMEs: What can you tell me about customers?
Jeremy: We have been in business since 2008 and since that time we have established a firm customer base. Our customers range from those who deal with us twice a week, to those who buy and sell cards around the holiday season only, when we get very busy around here as you can imagine.
Our customer base is loyal; they know they get personal service and the quickest turnaround time on orders in the industry.
FinSMEs: The team. Who is behind CardCash.com?
Jeremy: CardCash.com is led by its two co-founders Elliot Bohm, CEO, and Marc Ackerman, COO. As in any startup the two have worked 100 hour weeks to get the company to this milestone, doing everything from shipping out orders to brokering partnership deals with Amazon and the like.
As the company grew, a number of key hires were brought no board. Kevin Landsberg heads our technology development team and oversees operations; Jeremy Levi is our Director of Marketing; and Ralph Lasry runs operations.
FinSMEs: You just raised $6m. What can you tell us? How are you using the funds? Do you plan to raise external capital?
Jeremy: We are fortunate to have received venture funding from Guggenheim Partners, a world-renowned investment firm which counts the Los Angeles Dodgers and Dick Clark productions among its assets. They are taking a hands-on approach in helping grow the business.
The two main uses of the funds will be to continue adapting our technology to an ever-advanced tech world, and to help spread the word across America that those unused gift cards aren’t worthless; sell them to us and get paid for them, and then get a discount to one of hundreds of national retailers. We will be rolling out an advertising and branding campaign aided by the venture funding.
FinSMEs: Future Plans?
Jeremy: There are a lot of projects we are working on that will help streamline our system. As the world goes mobile, with more and more purchases and transactions being made on smartphones and tablets, we are adapting our technology to adapt to the mobile industry.