Whether you're a causal Amazon shopper, a small business owner, a dropshipper looking for arbitrage opportunities or a full time day trader buying and selling currencies and gift cards, we know you want competitive rates, fast liquidity and a platform you can trust. Back in 2017 Kyle and I were frustrated by the lack of options out there to buy discounted gift cards with bitcoin, so we decided to build an exchange (www.redeeem.com) to solve this very problem.
Depending on the brand of gift card, volume, desired discount, and method of payment there are a number of options ranging from a simple credit card purchase at CVS to a sketchy in person transaction with cash off Craigslist (I don't recommend this!). Realistically most people want between $250-$10,000 per month of various brands (with Amazon, Walmart, Home Depot, Best Buy being the most popular) at a discount between 10-20% off. To learn more about gift cards, check out this other blog post
Here are 10 things to consider when looking for a discounted gift card trading platform, and a few risks to look out for.
1. Quality of the Buyers
As a gift card seller, we know the rate matters, time to sell the card, and MOST importantly is the integrity of the buyer of that card. If a buyer lies about the quality of the card, and it leads to a dispute, you're guaranteed to waste time and worse loose money.
Now, there are a few things you can use to determine the quality of the buyers.
- Age of the website (use waybackmachine, or the founding date)
- Age, ratings of the buyer accounts
- Public reviews on Trustpilot
- Social media research (What do people say on Reddit, Twitter, Facebook, etc?)
2. Design of the website
The design quality of a website says a lot about the values of the company. If the design is visually appealing, formats well on multiple browser sizes, uses nice transitions, appealing colors, and has very few bugs then you can tell the employees take pride in their work.
It's just like when you meet someone for the first time and they look you in the eyes, give you a firm handshake, and speak clearly. This says a lot about that person in the first 2 minutes of meeting them. Discount gift card trading exchanges (and all companies, generally) are the same way.
Use common sense here, if the site looks sketchy but makes big promises, you probably shouldn't bother signing up.
3. Quality of Company Endorsements
Look for a partners page on the exchange website, do other companies endorse this company?
Here is an example of the partners page on Redeeem.com.
Is the company mentioned on other blogs?
Here's a podcast interview of the founders, Kyle Hill and Mike Townsend on the popular fintech podcast, Around the Coin.
Are the founders and team clearly visible and personable?
4. Know Your Customer (KYC) Process
All financial companies have some obligation to verify who they do business with, and you should be careful if a company advertises otherwise.
A lot of people interested in cryptocurrencies are looking for anonymous transactions, and no government oversight. However, in order for a company to be high quality and safe, it must comply with all applicable regulations in the places it operates. So rather than it being a sign of weakness, consider it a strength that at company has an anti-money laundering program, and verifies your identity.
At Redeeem, we invest a lot into hiring lawyers and a compliance firm to ensure the legality of our business model, which is something you should consider when starting to do business with a discount gift card exchange.
One thing to strongly consider is how the company checks your identity.
At Redeeem we contract with Civic to verify identities of our users. Civic is a 3rd party app and company that does the verification for us.
I personally believe that it is much higher risk to give your personal identity directly to a company, especially if the company is small. You're putting a lot of trust in people you've never met to keep your identity safe.
4. Accurate and Fast Dispute Mediation
In any good gift card exchange there will be some kind of dispute process, and you should investigate the quality of this process BEFORE you start trading.
At Redeeem we invested months into building our dispute process which is the most detailed and complex part of our business because we need to track all the data closely to determine if someone is cheating the system.
Less than .1% of the trades on Redeeem end in dispute, so it's a very save place to trade because scammers can rip people off easier in other places. We use multiple sources of data including Trust Ratings, Buyer's video recording, buyer and seller's explanation and 10+ other points of data when investigating disputes.
5. Quality of the support
It is engrained in Redeeem's DNA to give the best possible support to our users. We have live chat, we respond in less than 2 minutes, and we aim to solve all issues within 30 minutes. We invite feedback, suggestions, improvements, policy adjustments on live chat and in email surveys. We obsess about hearing how we could be better for our users.
However, this is not usually the case. You can tell a lot about a gift card exchange by how accessibly their support team is. If they don't have live chat, and they hide their support email deep in their support page, it's not a good sign.
The company either doesn't have enough people to manage support issues, or they don't care about answering them fast. Either way you can be sure if you have a problem in the future, you're not going to be a priority.
A good pro tip is to develop a relationship with someone on the support team before you need them. Just message in, build some rapport, and if you ever need extra VIP help, you can ask for them personally.
At Redeeem, the founders Mike and Kyle are available on live chat, and we believe that founders should always do some customer support to stay in touch with the needs of the users. If you ever want to get in touch with us, just ask!
6. Social Media Presence
In today's world there is no excuse for not being on social media. It's free and everyone can use it across the world. If a company doesn't have an active social media account on at least Facebook, Twitter, and Reddit than you might want to think twice.
It's so easy to build a website that looks legitimate, but so hard to build a loyal social media following. I don't want to say that follower count should be a deciding factor in using a gift card exchange, but it should be a clue. If you see an active community (and especially if they are positive) then you can be fairly sure you'll have a good experience too.
A side benefit of social media of course is that you'll actually learn something useful (hopefully true if you're reading this!).
7. Quality of Affiliate Program
Affiliate program's are a great sign that a company has their stuff together, for a few reasons. Firstly, affiliate programs in cryptocurrency aren't easy to build so if a company has one, it means they have some fairly talented engineers on the team.
Next, if they have an affiliate program it means people are using the service and referring friends, always a good sign.
At Redeeem we pride ourselves on having one of (but not the best) affiliate program that pays 1% recurring of your referrals' total trading volume, paid nightly in bitcoin. We did a fair comparison of the Top 10 Affiliate Programs to Earn Bitcoin.
This is a great way to earn passive income too! Check out the affiliate page for your link on Redeeem.com
8. Safe refund policy
This is going to be one of the most common questions to ask a discount gift card vendor website. There are two types of business models when trading gift cards, that are shaped by the payment method of the buyer. If the buyer is paying the seller in cryptocurrency, the buyer will get a much higher discount (sometimes 10X discount size), because the payment is fast and in crypto. For that higher discount amount, the buyer is trading their refund period.
Refund periods for buyers can be up to 1 year in companies like Raise.com and Cardcash.com that use credit cards, however for companies like Redeeem.com and Paxful.com, the escrow period is the refund period. Once a gift card to bitcoin trade is closed, there is no more refund.
However, when banks are involved, and the seller has a credit card and bank account on file with the marketplace company, the refund period can be much longer. This leads to higher quality cards for buyers, but much much lower discounts. At the end of the day, it's personal preference, but my personal (obviously biased opinion) is that if you're going to take the time to buy a discounted gift card, you might as well use cryptocurrency and save 20% or more. Even if one of every 10 cards is bad, you'll still make more than if you buy on Raise at 2% off.
9. Volume of cards available
Everyone wants a fast and efficient trade, and when you come to a site, you want to see cards available. It can be frustrating to login to your favorite gift card exchange and not see any cards available.
There is a strong network effect that takes place in marketplaces when buyers and sellers come together to trade. If the demand is too low, then sellers will get frustrated at not being able to sell cards fast enough. If the demand is high enough, there will be no more cards, and buyers will start to leave.
When we started Redeeem.com, it was a major challenge (it still is) to balance supply and demand of buyers and sellers.
To help solve the chicken and egg problem, we offer alerts to buyers and sellers whenever cards or buyers are available.
10. Quality of their blog
I know this can be an overlooked aspect of a company, but I believe that the blog is the voice of a company. It is where the founders and employees can express in depth the ideas about the industry and establish themselves as thought leaders, adding real value to the knowledge base of the world.
Obviously this is a bit meta because I'm writing this on our blog, and I believe that the great companies and founders compete to create not only the best companies, but also the best content and ideas.
So, when you visit any new site, take a look at their blog, get a sense for who the people are, are they just creating click bait keywords, or are they trying to deliver ideas of real value.
If you have any feedback on this article, or have any ideas for how we can improve Redeeem, reach out to us at [email protected] and ask for Mike.