News Column

Kiosks Turn Gift Cards Into Cash

Jan 2, 2013

Mary Vanac

Want to trade your gift card for cash? Look for the yellow kiosk with a sky-blue backdrop at your central Ohio Giant Eagle grocery store.

The kiosk is called Alula -- a bit of a tongue-twister. It comes from the same people who make Coinstar and Redbox kiosks and will make you a cash offer for your unwanted gift cards.

Alula gives you cash almost immediately, unlike a plethora of online gift-card exchanges or resellers, some of which require you to mail in your unwanted card and then wait for your check or electronic money transfer.

For grocery stores, the kiosk is "a new, innovative service that can deepen that relationship with customers and give them another reason to come into the store," said Elizabeth Larrick Lindemulder, senior marketing manager for Alula, which sprang from the suggestion of a former Redbox employee.

Services like Alula "make even small grocers that all-in-one shop for consumers so they can compete with the larger retailers that have wandered into the food world," said Nate Filler, CEO of the Ohio Grocers Association.

Giant Eagle is testing Alula kiosks at 21 of its central Ohio stores. For the small, virtual unit of Bellevue, Wash.-based Coinstar Inc., the test is a dream.

Giant Eagle is "a great player in the gift-card industry," Lindemulder said. "They are one of the primary reasons that gift cards have done so well in distributed sales (gift cards sold by companies other than the issuing retailers)."

The Pittsburgh-based grocery retailer also ties gift-card sales to its gasoline incentive program, called Fuelperks. "They've done a tremendous job marketing gift cards, and really driving and changing consumer behavior around gift cards," Lindemulder said.

Giant Eagle sees the kiosks as another convenience for customers.

"When you think about one-stop shopping, you think of some of the things we do, from our chef-prepared meals, to dry cleaning in the store, to the sheer volume of gift cards that we sell," said Brian Ferrier, Giant Eagle's regional director of operations for central Ohio.

Gift-card sales nationwide were expected to top$28.79 billion this year, according to the National Retail Federation. For consumers, Alula is a self-serve technology that can simplify and speed up a business transaction, just as an automated-teller machine can.

Using the kiosk is straightforward: Enter your gift cards (Alula takes more than 170 types); accept Alula's offer, which ranges from 60 to 85 percent of your card's face value; and take your voucher to a check-out line or customer-service desk at the grocery store to get your cash.

"It's like a currency exchange rate," Lindemulder said. "Walmart gift cards have more resale value in the market," so Alula offers a higher percentage of face value for these cards than for cards from smaller retailers.

Alula (the "thumb" of a bird's wing, meaning the service "helps gift cards fly home to a store") verifies your identity by asking for your credit-card number. It also limits your number of daily transactions -- an attempt to thwart gift-card thieves.

Alula resells its gift cards on online exchanges and reseller websites through a partner, Lindemulder said. The spread between the price for which Alula buys and then resells your card is how it makes its money.

The secondary market created by gift-card resellers serves consumers and retailers. "The ability to trade a gift card for cash or another gift card provides convenience, satisfaction and value to consumers," said Rebekka Rea, executive director of the Retail Gift Card Association, in an email.

Of course Alula isn't the only way to turn gift cards into cash. A number of websites have been in operation for years, providing that service.

PlasticJungle.com, CardPool.com and GiftCardRescue.com are among those that will buy gift cards' balances -- they also sell them -- and return value to their owners. For example, in the case of PlasticJungle.com, the company will mail a check, provide an Amazon.com gift card via email or make a deposit into the card owner's PayPal account, according to details on the website.



Source: (c)2013 The Columbus Dispatch (Columbus, Ohio). Distributed by MCT Information Services.


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