The dirty secret of the gift-card industry is that many of them go unused. At first glance, that looks like easy money for retailers, but with a slew of new regulations, unused gift cards are actually starting to become a drag on retailers’ books. In comes Kiind, a Victoria, Canada-based startup that only charges you for the virtual gift cards you send once the recipient actually redeems them.
The company already allows users to buy gift cards from major retailers like Amazon, Columbia Sportswear, Gap and several chain restaurants, as well as online music service Rdio.
As Kiind CEO and president Leif Baradoy told me earlier this month, the company is mostly gearing its marketing efforts at businesses that use gift cards as rewards and incentives. For these businesses, Kiind makes it easy to send multiple gift cards to numerous recipients through integrations with services like MailChimp and Salesforce.com. Individual users, of course, can also use the service to send single gift cards.
One nice feature of Kiind is that it also lets you send specific suggestions for what a user should buy with a gift when you send an Amazon gift card. The company’s B2B focus clearly shines through here, as it defaults to offering a selection of business books. Starting today, Kiind users can also select up to five gift suggestions when they send a card. Businesses, of course, can track exactly what happens to their gift cards, set expiry dates and resend them after they expire or just let them go unused (in which case they don’t pay for them either).
As Baradoy told me, the company charges a processing fee and also gets a 5 percent to 15 percent kickback from the retailers when somebody buys a product with its cards.
The company, which so far has raised $495,000 in angel funding, currently has six employees (in addition to its two co-founders). Its biggest challenge, Baradoy argues, is to nail down the right customer segment and area to focus on. While most people intuitively understand the value of its service, he noted, it’s still a new concept that will take some time to take hold – especially given that many larger businesses already have established relationships with other rewards and incentives providers.