Counting cards: Grocery store kiosks offer cash for gift cards

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AURORA | Gift cards are an increasingly popular Christmas and birthday present. But if you’ve ever left one languishing in a junk drawer for months or even years, you know the occasional sad truth about gift cards: sometimes they go to waste.

A new company with a handful locations in Aurora is hoping to turn those unused gift cards into cash.

Alula KioskAlula, which is part of Coinstar, Inc., has placed its bright-yellow gift card exchange kiosks in four King Soopers stores around
Aurora.

The kiosks will pay customers cash for their unused gift card.

Jeff Dirks, vice president and general manager of Alula, said the company launched in late 2012 with a few kiosks in Columbus, Ohio and Phoenix. Since then, the company has grown to eight markets around the country and a few hundred kiosks.

Dirks said the kiosks don’t give a set percentage of cash for all gift cards, but instead rely on almost- instant market data to determine how much they are willing to pay for a gift card.

“It just all depends on the supply and demand on a real-time basis,” he said.

The company works with another company that runs gift card islands at grocery stores around the country to track which cards are particularly valuable, and which ones aren’t.

“We’ll know within a couple of seconds what we are ready to offer the consumer in terms of cash value,” Dirks said. Sometimes, that might mean 75 percent of the remaining value on a card that the company deems particularly valuable, but Dirks said the numbers can be less in cases where the cards aren’t very valuable.

The hard part from Alula’s end, Dirks said, is to walk a line between making too low of an offer on those cards that might be tough to resell.

“We’re really trying to strike that balance,” he said.

Once the Alula has a used gift card, Dirks said they can do a couple things with them. In some cases, they work with a gift card company to bundle together cards from a particular store and buy more cards there. Other times, Dirks said the company will resell the cards online.

“There is a very big secondary market for used gift cards,” he said.

And there’s a massive market for gift cards in general.

According to the National Retail Federation, shoppers spent almost $30 billion on gift cards around the holidays last year.

Each shopper spent on average $163.16 on gift cards, up 4 percent over the $156.86 they spent in 2012, according to NRF.

“Shoppers today recognize gift cards as the perfect fool-proof option for friends and family,” NRF President and CEO Matthew Shay said in a statement last year. “And traditional gift cards aren’t the only winners this holiday season, as more and more Americans are tied to their mobile devices, we expect digital gift cards to be especially popular with consumers.”

Dirks said Alula only accepts plastic gift cards right now, but the company hopes to be able to accept digital gift cards in the future.