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Gift Card Auctions, Bane or Boon for Card Providers?

One sure sign that a product has reached critical mass is when secondary markets start to emerge. If the rash of new sites offering gift card auctions is any indication, gift cards have reached that critical mass.

Gift card companies and independent e-commerce entrepreneurs are developing online auction sites that allow consumers to buy and sell gift cards, just like any other commodity. And, the action on these sites is heating up. Buying goods through Internet auction bidding has grown at a phenomenal pace, partly because the bidding process is fun for the customer and more exciting than receiving discounts in email.

On any given day, thousands of gift cards are offered on eBay, and consumers are finding that they can save up to 50% through the popular online auction site. Legitimate sellers are able to cash out unwanted cards.

Is this evolving secondary market beneficial to gift card providers, or should they discourage them? The answer is not yet clear, so let’s take a closer look at some of the gift card auction sites.