This is a rush transcript from "Your World," December 27, 2011. This copy may not be in its final form and may be updated.
ERIC BOLLING, GUEST HOST: This Christmas, gift card sales expected to reach a record $28 billion. Those plastic presents are number one on people’s wish list, but what if you received one to a store you really didn’t like?
My next guest runs a Web site to swap out gift cards.
Bruce Bower is CEO of PlasticJungle.com.
By the way, Bruce, when I heard this idea, I thought it was a fantastic idea. Tell us how it works.
BRUCE BOWER, CEO, PLASTICJUNGLE.COM: Well, what we do is, if you received a gift card and it just isn’t the right match for you, we will offer to purchase that gift card for up to 97 percent of the value.
What we will then do is verify the gift card, bring it on to our Web site at PlasticJungle.com, and then someone who does want to shop that brand can come along and buy it, also at a discount, albeit slightly less discount than you sold it for us.
BOLLING: OK. So, in other words, I, as the gift card holder, let’s say I have $100 gift card. What am I likely to get for it?
So, it depends on the brand. You could get up to 92 percent if you chose to be paid in cash or if you had a deposit into your PayPal account. If you chose to pay out in an Amazon gift card, you could receive up to 97 percent. On average, you could expect to receive between 80 percent and 85 percent of the value of the card.
BOLLING: And do you buy the gift card before you sell it, or is it on consignment for you?
BOWER: We do. We buy it. And the reason we buy it is because we offer a secure service.
And we want to make sure that you, the purchaser, are actually protected. So we actually take title to all the cards. And we will resell that card to you after we verify the balance.
BOLLING: Are there stores and retailers that you will not take?
BOWER: Very few.
We accept up to 400 brands and almost every national brand. There are a few instances where we may not be able to verify the balance, and we wouldn’t carry those. But I think almost any store that you would shop and most persons would shop on a national level, we actually transact in.
BOLLING: Are you seeing a lot of swapping let’s this year vs. last year? But is the trend growing?
BOWER: Oh, absolutely. Not only is the underlying gift card market growing rapidly, but I think consumers are becoming more and more aware of the fact that these gift cards that are going unused have real value.
There is about $100 billion in store-issued gift cards that will be sold this year, and 68 percent of that will go unused. And over time, that has accumulated to about $30 billion in unused values. Consumers now understand that they have a choice and don’t just have to maybe reluctantly shop at a retailer they don’t favor and can actually get some real value from it.
So, we think we offer a really valuable service that complements the growth in the market. And, the result, our business is growing very rapidly.
BOLLING: Hey, Bruce, who are the big -- who do you see the most? Who comes across the Web site the most, which retailers?
BOWER: Well, we tend to see the big national retailers, a Target, Wal-Mart, Best Buy, Home Depot.
We also see lots of iTunes cards. And we see Starbucks, for instance. But we tend to track pretty closely to retail sales in the U.S. We really reflect, reflect those sales pretty well.
BOLLING: What if a retailer goes under while you are holding a whole bunch of gift cards?
BOWER: Well, we have a 100 percent guarantee. So if that were to occur, we would actually make good on that gift card.
BOLLING: Wait. Hold on.
BOLLING: If I swap a gift card or I buy a gift card at, whatever, 92 cents on the dollar and the retailer goes bankrupt, you will make good on that gift card?
BOWER: If you bought it from us, we will actually guarantee the value of the card. We guarantee. We actually verify all of the balances to make sure that the consumer has a great experience.
We’re creating a trusted marketplace and that is part of our guarantee.
BOLLING: How many -- what is it, $28 billion in gift cards this year. Give us a sense of how big the swap market is.
BOWER: Well, actually, some estimates say that the total store-issued gift cards may be even bigger, around $100 billion.
Probably in the secondary market, which is what we call our market space, it will total around $100 million this year. But it is growing at triple-digit growth. We have seen that over the past few years and we expect it to continue.
BOLLING: I think it’s a great brand idea. Bruce Bower, thank you so much.
It’s PlasticJungle.com, CEO.
Thank you, Bruce.
BOWER: Thank you very much.
BOLLING: All right.
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