Wal-Mart is offering to take people's unused gift cards from other stores in exchange for Wal-Mart gift cards that they can then use to purchase TVs, smartphones, clothes, kitchen appliances, office supplies, bath items, groceries and the myriad of other things one can buy at the retail chain.
Up to $1 billion worth of gift cards will go ignored this year, according to CBS TowerGroup. Wal-Mart, however, sees this as a $1 billion opportunity to cash in on people's unwanted gift cards by launching a program in partnership with CardCash, the country's biggest gift card exchange website.
"We recognized that this was an opportunity," says Wal-Mart spokesperson Ravi Jariwala. "A large number don't get redeemed. We figured this was a good way to get gift cards in the hands of more customers."
People who have plenty of unused gift cards can go online at Wal-Mart.cardcash.com to exchange their gift cards for an expiry-free Wal-Mart gift card that can be used when shopping online or at any of the physical Wal-Mart stores nationwide. They can simply enter the merchant's name and the card balance and Wal-Mart will calculate how much they can get in exchange.
Not every gift card from every retailer will be eligible for exchange, but with Wal-Mart having 200 partners, there is a good chance that customers can exchange at least some of their unused cards. Also, Wal-Mart offers only up to 97 percent of the original gift card's face value. For instance, customers can get 95 percent of the value of their Amazon gift cards, and 90 percent and 85 percent for Staples and Gap gift cards respectively.
Wal-Mart's gift card exchange program is currently in test mode. If it turns out with positive results, the company could eventually roll it out as a permanent program throughout the entire year. Jariwala says Wal-Mart currently doesn't have specific metrics for determining the success of the program, but it is taking a "wait and see" approach for how it will turn out.
If the program becomes successful, it will be another opportunity for Wal-Mart to make more money on its own products. Aside from the small percentage it takes from users' unused gift cards, Wal-Mart will also be able to make more money as it becomes easier to convince people to shop on the website once they're there.
CardCash CEO Elliot Bohm says Wal-Mart gift cards are the most sought after cards in the country.
