So I recently came across this great site Raised.com for buying gift cards at a discount. Since Plastic Jungle has shut down, this seemed like a fantastic option: a peer-to-peer marketplace for buying gift cards at a slight discount. For a $100 purchase, you might be able to save an extra 10% by paying using a $100 gift card you bought for $90 on Raised. And although you can’t “stack coupons” at most stores, you can apply 1 coupon and still pay with a gift card – hence you might be able to get an amazing deal.
The risk with gift cards of course is that you end up buying the card and never using its full value. So I decided to try it out with one of my biggest and most annoying expenses – Starbucks coffee. Between me buying coffee just so I can sit someplace with Wifi between meetings, and all the Pumpkin Spice Latte runs I’ll be making for Aisha this fall, I figured saving 10% on all those damned cups of overpriced bean-water was worth trying Raised.com.
Well, it hasn’t really worked out so well. It seems that Raise doesn’t do much to verify if a gift card is valid before selling it to you. so I ended buying a card, waiting a day for the card code to be emailed to me, punching in the code on Starbucks’ app only to discover it was invalid. Emailing them to request a refund. Getting a refund. Trying again. Ordering another card. Waiting for delivery. Punching it in again. Coming up invalid again. And requesting another refund. And all of this so I can save $9 (9% off on a $100 gift card). This amount of agony simply isn’t worth it. It’s a good looking website, but don’t let that fool you – they haven’t worked out the product.
A lot of bloggers have focused on Airbnb’s brilliant growth hacking and how they brought both sides of the marketplace onto their platform, but another key to Airbnb’s success was eliminating risk and solving convenient payments (credit cards). If I stay with someone I find on craigslist, I don’t know if this place is good, clean, or safe. Airbnb offers professional photos, reviews, and who our mutual facebook friends are, so that I feel secure. In the other direction, the host can see Facebook friends, where else this person has stayed, and how other hosts reviewed him/her, so again I can feel secure. Furthermore, Airbnb swipes the guest’s card, holds the money in escrow, and deposits it once the stay is confirmed complete and satisfactory by both parties – again eliminating risk while solving the payment problem.
For Raise to be successful, they need to do more than bring the marketplace onto the platform. They need to verify every card and eliminate the risk for both parties. Without that, it’s not a complete product.