Local man’s Web site helps consumers track their gift cards

CHESAPEAKE

Ken Hawkins figures plenty of shoppers are like him – sitting on a stack of gift cards without knowing whether they expire or how much they’re worth.

Back in October 2004, the Chesapeake resident walked into a local Office Max with a $50 gift card he had tucked into a drawer more than two years earlier. When he reached the store register, he learned that his gift had vanished.

Under Office Max’s policy at the time, the card began losing $2 per month in value after 24 months of non-use, with the deductions retroactive to the date of purchase. That wiped out his entire balance.

Soon after that, Hawkins came up with GiftCardTracker.

com Inc., a Web site devoted to everything a consumer would want to know about gift cards. The site, which launched in October, allows users to register their gift cards – recording the retailer, amount and account number – and set up e-mail reminders for expiration dates or events that would make good use of the gift.

“Everything I’ve done is oriented toward consumers,” Hawkins said, “because that’s how I got into this.”

GiftCardTracker and similar sites serve as organizational tools aimed at helping shoppers get the most from their cards. They target a populace that’s increasingly inclined to embrace a piece of plastic as a present.

For 2007, the estimated value of gift cards sold grew to $97 billion, up almost 17 percent from $83 billion in 2006, according to TowerGroup, a market research firm for the financial services industry. About 8 percent of that total will go unused, TowerGroup estimated.

“Most gift cards today do not have expiration dates,” said Tina Henson, founder and chief executive of Plastic Jungle, an online trading site for gift cards. “Now, the major issue is: Where is the gift card I got two years ago?”

With GiftCardTracker, Hawkins hopes consumers will make smarter card choices. A shopping function on his site called Gift Card Report Card lists more than 1,000 retailers – including restaurants, hotel groups and entertainment venues – and their expiration policies or maintenance fees, which might kick in after the card goes unused for a certain period.

Each retailer’s Report Card page links users to the retailer’s Web site. The pages include details such as whether any related chains accept the retailer’s gift cards – EB Games, for example, will take a GameStop card – and shipping information for cards bought online. Silver Diner restaurant chain, Hawkins found, charges more than four times as much as Red Robin to ship a gift card.

“With the economy the way it is, everyone should be interested in saving a buck,” he said.

Hawkins has established himself as something of a gift-card guru, a cyber expert on all things gift card. At his home office, he keeps a large binder with multiple gift cards inside each plastic page. In his “Bytes from the Card Shark” column on the Web site, he shares tidbits on gift-card deals he has discovered or pitfalls to avoid, such as fraudulent cards sold on eBay or cards sold by Walgreens for restaurant chains that no longer accept them.

GiftCardTracker’s registered users can report their cards lost or stolen to a monitoring service that can access their account numbers 24 hours a day, seven days a week, even if they’re traveling. The service will alert retailers that will freeze the balance – only about a quarter of retailers do, Hawkins said – before a thief can drain the card.

The Retail Radar Screen feature of GiftCardTracker provides financial news such as bankruptcies, consolidations or store closings that could restrict consumers from redeeming their cards. The site noted, for example, when the bankrupt chain The Sharper Image stopped accepting customers’ gift cards and when it later resumed accepting them. Users also can search by state for laws related to gift cards.

Hawkins’ closest competitor today is Leverage Inc., which launched in December at www.leveragecard.com. Leverage offers a marketing venue where consumers can take advantage of special deals from retailers without sharing personal information. Once users register their gift cards or any “loyalty,” or frequent-shopper, programs with particular retailers, companies can target them with online offers – typically discounts, sales or free shipping on their Web sites.

“We made it intentionally very easy to select or participate only in the things you’re interested in,” said Jennifer Mathe, the site’s co-founder and chief operating officer. The marketing piece makes it “a revenue-producing service.”

For the registry, Leverage lists between 400 and 500 retailers that can automatically track and supply gift card balances from users’ account numbers. On balances it can verify, Leverage will pay annual interest of 1 percent.

Consumers can buy gift cards from about 200 retailers from Leverage, which takes payment and orders the card for them. In most cases, Leverage buys the cards at a discount and earns the difference as revenue.

Leverage can hold the gift as a “virtual card” before shipping it, giving the recipient the chance to swap it for a card from a different retailer, if preferred. Leverage also will insure a card bought on its site, so if the retailer goes out of business, any remaining value will go into a customer’s online “wallet” to buy another card.

Leverage also allows consumers to trade gift cards and provides a theft-and-loss monitoring service like GiftCardTracker.

When Hawkins first envisioned his site, he said, he saw nothing like it on the Internet. He registered the domain name but kept his job as marketing director for the Radisson Hotel in Norfolk while he tried to figure out a way to make it work. By late 2006, then in marketing for the Hawthorn Hotel & Suites in Portsmouth, he decided he was ready to devote himself to the concept full time.

So far, he’s not making much of a living from the site. Expenses come out of his pocket. To generate revenue, he hired a small sales team that will work out of their homes and soon begin soliciting advertisers.

Retailers might pay to send a “thank you” message to GiftCardTracker users when they register their store’s gift card or to link information – about a current sale or a new product – to users’ e-mail reminders. With fewer than 600 users now who have registered their gift cards, Hawkins conceded he will have to build more traffic to attract advertisers.

“I only see it growing,” he said, insisting that his site will remain oriented to consumers, not businesses. “I’m not necessarily saying gift cards are so great.”

The relationships that gift-card sites can build between retailers and consumers will determine their success, said Nikki Baird, co-founder of Retail Systems Research, a retail industry research firm. Retailers are clamoring to reach their customers – particularly those who still have gift cards to spend.

“Anything that makes it easier for them to consume these gift cards is going to make it more valuable to both the consumer and the retailer,” Baird said of sites like Leverage and GiftCardTracker. “I, right now, have four gift cards that all have something like 20 bucks or 10 bucks left over and are just sitting there.”

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com