The United States Gift Cards Market was estimated at $158.26 billion in 2021 and is expected to reach $167.71 billion in 2022, and is projected to grow at a 6.25% annual rate, and reach $227.82 billion by 2030, according to Digital Journal.
According to CardFunder’s founder and CEO Russ Howard, over $3 billion of worth of those cards go to waste annually, totaling over $40 billion over the past decade. In fact, 51% of U.S. adults have at least one unused gift card, BankRate has found. The average person has $116 in these unspent funds, and 73% have had their gift card for a year or more.
Russ rattled off these head spinning stats to me in a recent phone interview and it was the impetus for his new CardFunder startup. “We’re a purpose-driven company that aims to innovate and accelerate giving,” says Howard. “It’s fast, it’s easy, and it makes a meaningful impact without interrupting their other charity type events.”
This is not the first time Russ has been involved in a secondary or repurposing market. Russ architected the largest “buy-sell-trade” model in U.S. history over two-decades ago. From 2000-2004 Russ led the formation of GameStop’s Software/Hardware Reclamation strategy, becoming the largest operation of its kind in the U.S. At the same time, he directed the strategy and process of consolidating three independent entities (Software Etc, Babbage’s, Funcoland) into a unified GameStop brand in advance of the companies’ 2002 IPO.
Paying It Forward
Russ takes a great deal of joy from the initial outcomes of his “turn-key” event-in-a-box fund-raising model, designed to provide not-for-profits with a capital infusion, in a pretty painless process. It is currently being utilized by schools and churches, but Russ expects the program to branch out to other non-profits for youth sports, and other community fund raising. “One church group in one weekend raised $20K, in the single largest nontraditional giving events ever for them” he stated with immense pride, albeit surprise.
CardFunder accepts cards with a minimum of $5 dollar balance from upwards of 2000 different regional, and national brand vendors. They utilize a host of secondary resellers, and gift card marketplaces. The rates offered for gift card exchanges vary depending on the Merchant and Marketplace, but Russ indicated that they are able to return between 60% and 85% of the remaining card’s face value, back to the charity. The turnaround time is approximately two weeks.
Innovating Giving with No Upfront Costs
We are able to “innovate and accelerate giving and do it with ease.” Best of all, there is no upfront investment for the groups, so there is zero risk. They simply download the entire toolkit, which includes simple and well designed “How to Tools” to promote the event on their platform’s social media sites. These events do not necessarily replace other annual fundraisers but can become additional “purpose driven” campaigns that yield terrific returns, with all parties feeling a sense of gratification in the process.
Russ indicated that there is an app was in the works that they expect to introduce in three to four months. This would enable a group to utilize a “top-down” approach as apposed to the current “bottom-up” do-it-themselves approach. The return sharing would be different, but it enables groups to outsource the entire process to CardFunder if desirable.
Russ does not like to be thought of as a disruptor, but this has all the earmarks of disruption in my mind. And besides being an incredible idea, at a time when all not-for-profits are being forced to do more with less, they have done their “brand packaging” homework.
The quality of the Social Media Toolkit is first rate. Russ and his team clearly availed themselves of some great graphic design talent to enable any non-profit to put together a compelling event or campaign, with no heavy lifting. Once activated the group can expect their community to take notice, and begin searching drawers, purses, pantries, and pockets, in a kind of “lost and fund” effort.