The Card-Linked Gift

It’s hard to imagine that a decade ago we didn’t have products that consumers use daily like the iPad, Uber, Waze and Venmo. Each of those staples caught on like wildfire while other popular services like Hulu(launched in 2007), PayPal (1998), Netflix (1997) and Amazon (1994) took years for consumers to adopt.

The GiftYa concept was conceived just over 10 years ago and as with many great inventions, the idea was crafted before the technology fully existed to support it.

The problem we identified many years ago is that gift cards are too easily lost, stolen or forgotten about and the full value of the gift often goes unused. The solution was to tie the gift to a recipient's existing credit or debit card. That way the gift could not be misplaced, and the full value was much more likely to be used even if the recipient didn’t remember they had a pending gift value. However, in 2008 and for several years thereafter, this was not a possibility.

The Birth of Card-Linked Offers (CLOs)‍

In the 1990s and through 2010, nearly every retailer was pushing consumers to sign up for their reward and loyalty program.Enrollment was typically accompanied by a plastic card that would fit in your wallet or on a keychain.

The early part of the 2000s also brought about the deal-of-the-day sales trend, pioneered by popular websites likeGroupon and Living Social.

As smartphone adoption took off, reward programs moved to the digital world and daily deal sites struggled with the manual process of issuing paper certificates. However, consumer demand forgetting deals, discounts and rewards did not subside…we just wanted a more convenient way to manage them all.

This demand led to the growth of what’s called a card-linked offer otherwise known as a CLO.

A card-linked offer refers to a consumer receiving a coupon, promotion or reward value onto their existing credit or debit card for a qualified transaction. The major payment networks includingVisa, Mastercard, and American Express have created platforms for banks, retailers and marketers to track and manage these ‘offers’ to their participants.

The way it works is a publisher (on behalf of a retailer or restaurant) presents a discount or offer to a consumer and the customer enrolls their existing debit or credit card which is passed to the applicable card network (Visa, MasterCard, etc). The network then watches for a qualifying transaction to happen at that retailer, notifies the publisher, and credits the customer's card for the promised amount automatically.

Why GiftYa Leverages Card-LinkingTechnology

While many people do not yet know what a card-linked offer is, the program has grown tremendously in the past 5 years. In 2013, an industry association called CardLinx was formed to collaborate and establish standards. Notable members include Microsoft, Samsung, Hilton, CaptialOne, Mastercard and dozens more. To date, CardLinx reports more than 6,000 merchants and 700 million users worldwide participating in CLOs.

We started working with Mastercard and Visa over the past two years to implement their CLO technology as the power behindGiftYa.

Not only did this help fulfill one of our visions to reduce and eliminate some of the waste (unused gift values) in the gift card space, but we found many other benefits for gift-givers and recipients including:

Choice

By leveraging Visa and Mastercard’s network, you can gift a gift to thousands of popular local and regional brands that are not available on the traditional gift card racks in your grocery store. Local businesses can join GiftYa for free and have their own eGift option available to their customers within days. There are currently more than 5,000 locations available on GiftYa.

Speed And Convenience

GiftYa allows the giver to send a gift in minutes from the convenience of their phone or computer. While this sounds like a simple thing, sending a gift card in the mail takes days, and if you have ever tried to send an eGift card online, in most cases it takes several hours because of credit card fraud concerns. The technology behind GiftYa makes it difficult if not impossible for fraudsters to manipulate, which allows us to deliver the gift minutes after its ordered.

Security And Reliability

Gift card scams cost consumers and retailers millions of dollars every year. The reason why is gift cards are anonymous and extremely difficult to trace back to a purchaser or recipient.

With GiftYa, the gift is securely attached to the recipient's Visa or Mastercard and all account information is maintained by those networks (i.e. we do not store any card information). If a recipient loses their credit card that the gift is attached to, the gift can be transferred to their new card.

Paper Or Plastic: None Of The Above

Industries do not shift overnight. People get comfortable with the products and services they use and need to see their peers embracing alternative solutions before they change.

The gift card started to replace paper gift certificates in the ‘90s and since then the product has not changed much outside of the packaging. Electronic gift cards are available but typically limited to larger brands and pose the same problems with unused funds and fraud.

GiftYa may not replace the gift card in the next several years, but it's already filling a void for customers looking for a fast, easy and reliable way to send a personalized gift.

Written by Mark Romanelli, Chief Product Officer