Yiftee Sees Opportunity in eGift Cards for SMBs

Coupons, pre-paid deals and card-linked offers have established themselves in the local digital promotion ecosystem. But what about gift cards?

Leading Gift Card companies like BlackHawk Network and Incomm provide dozens of gift card slots in retail establishments for hundreds of national brands, from Amazon to Starbucks. On the Internet, First Data’s Gyft and Transaction Wireless provide card-to-online registration for many of the same national brands.

Local merchants don’t really have the same capabilities, however, and are mostly limited to issuing check-like gift certificates. One SMB gift card solution was provided several years ago by Adility. It has since been folded in with Incomm and focuses on validated coupons. A current candidate is Yiftee, a three- year-old startup launched by Donna Novitsky, who previously launched BigTent, a social groupware provider for women currently owned by Care.com.

Yiftee provides online promotion and gift card capabilities to both national and local businesses – the former acting as a traffic draw, and a validation point. “SMBs are more comfortable when they see brands like TGIF or Sephora doing the same as they are about to do,” says Novitsky. She notes that the inspiration for Yiftee came from a deal that BigTent ran several years ago with Groupon. “We wanted to a better job of generating profitable business for SMBs, not bargain hunters with no margin for the SMB.”

The company currently supports 55,000 locations, with 5,000 of those local brands. Ultimately, independent stores and local chains are expected to represent the bulk of the company’s activity, giving consumers the ability to “shop local” for gift cards on mobile and online.

Independent stores pay Yiftee $30 a month (or $240/yr) to put a button on their website and FaceBook and sell unlimited, customized eGift Cards. They also get to take part in the Yiftee network, which is used by both consumers and enterprise customers to find local businesses and purchase eGifts. No setup fees or technology integration or training is required. National players pay $12 per location when they sign up 10 or more. Up to now, chains with up to 300 locations, such as Schlotzsky’s Bakery Cafe, have been the company’s sweet spot.

One additional advantage of using the card is it provides a set of user analytics. Plastic cards don’t provide much data on the purchaser, recipient or occasion, unlike digital cards, notes Novitsky. If advertisers include a TXT link to their ads to “win” a card, they can complement TV, cable TV, radio, social and print campaigns and see what is really working. eGift Cards are frequently used as “Thank You’” presents, for customer recovery, and as marketing incentives by local merchants and community members, such as real estate agents, to drive local business.

Some of the sales for Yiftee come from direct requests by consumers and companies who see a listing on Yiftee.com and want to get a card. (I requested one from “A Little Shop of Bagels” in my hometown). Most, however, are being sold on the merchants’ websites and social media channels, bringing more customers into their stores. Yiftee also signs up merchants via payment processor partners, such as Global Payments.

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