Redeem Online with Payment via Check:
In this transaction, the seller agrees to transfer the gift card or merchandise credit codes via a secure online portal. When the buyer receives the card information, he will check the balance on the card, then write a check to the seller and mail it back. Generally, this transaction method yields a mid-level price for the seller. Why?
The transaction is similar to the In-Mail transaction. Compared to the In-Mail transaction, it will take roughly half of the time to complete. However, this is still a relatively long time. Once the check is mailed, it takes several days to be delivered to the seller. Even then, the seller must physically deposit the check in the bank. Even after deposit, the check still takes up to 5 days to ‘clear’ or be finally realized into the sellers account.
This process gives the buyer time to turn around and re-sell the gift card using his marketplace. Many times, if the re-sale pricing is right, the buyer will be able to immediately re-sell the card and ship to his customer. The end customer can then spend the gift card and there is no further risk to the buyer that the gift card may ‘Go Bad’.
So, if that process is the similar, why does the transaction generally yield less for the seller? There are two reasons: First, in this transaction the physical gift card does not change hands to the buyer – only the codes on the back. Therefore, the risk to the buyer is greater that the transaction could ‘Go Bad’. Second, in the re-sale transaction there are fewer buyers who prefer to buy only gift card codes because they can only be used online. Therefore, the original buyer will have a more difficult time to re-sell the codes and turn around the transaction quickly.
These two factors combine to increase the risk of the transaction for the original buyer – and therefore the price that he is willing to offer is lower than an In-Mail transaction.
For the seller, this transaction completes quicker than an In-Mail transaction. The reason is that by sending the codes online, the seller is eliminating the time it takes to mail the physical card to the buyer. Generally the transaction will take half the time of a similar In-Mail transaction. This is the trade-off for the seller. He receives the money quicker but will generally receive less than an In-Mail transaction.