Originally published by PYMNTS.com.
The gift of giving just got a whole lot easier and more digital, thanks to CashStar, a Portland, ME–based prepaid and digital gifting solutions provider.
Founded in 2008, CashStar began under the premise that digital gift cards would be the death of plastic, said Gerry Gilbert, VP of product. While plastic isn’t totally dead, digital has definitely grown since CashStar’s beginnings.
The company has grown to take on a more open approach to the gifting space. “At this point, we’re a bit agnostic as far as a form factor is concerned,” said Gilbert. “We’ve done a fantastic job growing the digital gifting space by huge amounts of volume—it’s the fastest-growing part of gifting that’s growing. However, plastic still has its specific use cases.”
CashStar’s newest addition to the gifting space, the Product eGifting solution for retailers, aims to improve buyers’, receivers’ and merchants’ experience in the gifting process, which, until now, had the nasty tendency to get a bit complicated.
“We’re solving for a very specific use case,” said Gilbert. “Recipients love getting gift cards, but purchasers feel guilty giving them. Buyers feel like they weren’t being thoughtful enough, or it isn’t personalized enough. It creates this interesting dichotomy where the gift I want the most is the one you’re least likely to get for me.”
Thus, the cycle of gift returns begins—a scenario many are all too familiar with. In place of gift cards, givers buy specific items the giftee may or may not want, or even fit into.
“They’ll go out to a website and say, ‘Oh that’s a nice sweater. I’ll buy that’ without knowing your size or the color you like,” said Gilbert. “So, you get a gift that you don’t particularly want and, along with it, the hassle of having to deal with the returns process.”
The returns process doesn’t just present a hassle to consumers. For merchants, gift giving often drives lower conversion rates and costly returns. “That store now has to deal with that sweater and the overhead associated with it,” said Gilbert. “The same is true if it’s returned to the fulfillment center.”
According to data from the National Retail Federation, about 15 percent of holiday sales were returned last year—an estimated $90 billion worth of merchandise.