Photo by Kyle West
Four McMaster students are helping a local gift-card cash-exchange company grow unexpectedly quickly in a relatively untapped Canadian market.
GiftCash is an online service startup based in Dundas that buys unredeemed or partially redeemed gift cards from customers in exchange for a percentage of the remaining value.
The company was co-founded in 2017 by Colin Moffat, a McMaster actuarial mathematics graduate, and his partner Kaya Harrod.
““Everybody buys gift cards and everybody receives them as gifts, and, a lot of time, people don’t really want them,” Harrod said.
GiftCash runs a relatively simple but effective service. Prospective clients can go onto the site and check their gift card balance before submitting it. From there, the company offers a percentage of the card’s value. If the customer accepts, they receive an e-transfer payout within five business days.
Harrod and Moffat, are both from Ontario. Before starting the business, Moffat was playing professional poker in Las Vegas while completing his undergrad.
Inspired by a friend, Harrod and Moffat started the company as Moffat finished his degree. They officially incorporated GiftCash in August 2017, and hired their first employee in November.
Since 2017, GiftCash has grown quickly. Currently, more than 10,000 ‘orders’ of gift cards have been submitted to GiftCash, amounting to more than 40,000 cards redeemed by clients in total.
According to MarketWatch, Americans spent $130 billion on gift cards in 2017, but $1 billion were unspent.
One estimate in 2011 found that Canadians spent $6 billion a year on gift cards.
Because the Canadian gift card exchange industry is not as well-developed as the American market, Harrod and Moffat targeted Canadian clients at first.
“Raise and and CardPool kind of monopolized everything in the US, and they bring in millions of revenue themselves. There’s nothing really like that in Canada,” Harrod said.
GiftCash’s biggest gift-card exchange competitor in Canada is CardSwap, which was founded in 2009.
However, encouraged by their early success, GiftCash expanded to the U.S. last year.
The company now already receives more orders per month from the U.S. than Canada.
GiftCash has fostered a close connection with McMaster as it has grown.
Including Moffat, eight GiftCash employees out of a total of fourteen in Canada are McMaster graduates or co-op students.
The company hired its first McMaster co-op student in 2018.
Currently, there are four co-op students working as data analysts, and Harrod and Moffat are looking to add to their team.
Harrod admits that she and Moffat did not expect the business to take off as fast as it did.
“Honestly, we didn’t realize how big of a market this was until we kind of started. We kind of just jumped in headfirst and decided to do everything that we could,” Harrod said.
Harrod hopes GiftCash will be able to take the next step and become a major player in the Canadian and American market.
“Hopefully, by the end of this year, we’ll have better infrastructure on the web site side, and we’ll have a larger workforce,” Harrod said. “We’ll be maybe not totally up there. I think that’s a little bit of a high achievement. But at least we’ll be making a peg in the wall as we climb up to the top with our competitors.”
Students can find out more information about the startup at https://giftcash.ca/.