Q&A with Ben Kaplan, CashStar
More than six months into his new gig, CashStar’s CEO explains why the biggest potential for digital gift cards may lie in promotions, loyalty and customer service.
Paybefore Award-winning CashStar set out five years ago to shake up the traditional gift card model, introducing technology that would take retailer-branded gift cards digital and mobile. Beginning with CVS/pharmacy and Home Depot in 2009, CashStar now has more than 300 retailers—plus several in the U.K.—using its platform to deliver multichannel digital gift cards for the consumer and B2B incentive markets.
In a revamp of its platform this year, CashStar now offers advanced marketing tools that the Portland, Maine-based company says will help make its next big push.
Ben Kaplan, CashStar president and CEO, who joined the company last fall from Cartera Commerce, talked to Paybefore about how he envisions his company’s products evolving beyond gift cards to become potent retail incentives and promotional tools.
Paybefore: CashStar is seeing significant year-over-year growth with digital gift cards. Are digital gift cards putting a dent yet in physical gift card volume?
Ben Kaplan: A big chunk of the gift card market will remain plastic. Closed-loop gift cards are a $120 billion market, and so far only 2 percent or so is digital. But with the double-digit growth rates in digital cards, we’re seeing a great growth trajectory. Our technology, scale and speed have come so far.
Paybefore: Beyond improving efficiencies in gift card distribution and redemption, what untapped opportunities do digital gift cards offer retailers?
BK: Digital gift cards are evolving to play a bigger role in promotions. Study after study suggests consumers throw coupons away, but they value gift cards. Digital gift cards—particularly in the mobile channel—are persistent marketing tools that are easier to keep than to throw away. Instead of giving coupon discounts, retailers influence consumer behavior by incenting additional purchases with digital gift cards, driving product sampling and all types of other creative brand engagement.
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Paybefore: CashStar partnered with Starbucks for last year’s Tweet-a-coffee promotion to send $5 Starbucks eGifts via Twitter, but there aren’t a lot of other examples like this.
BK: Some would say gifting and commerce through social media hasn’t taken off yet to the degree many expected. But CashStar is working with Facebook in this area, and we’re handling a growing share of the digital Facebook Gifts available on the site. I believe social media gifting has massive potential for development, though the consumer education and adoption is still coming along.
Paybefore: What’s the next frontier for digital gift cards?
BK: Everything from enabling small retailers to offer digital gift cards to really intricate marketing promotions for large retailers targeting specific customers. Digital gift cards will play a bigger role in loyalty, customer service, product exchanges and warranties, for example, by issuing a digital gift card on the spot—at the store, online or on the phone with a customer service rep. And mobile—for selling and distributing and redeeming gift cards—is at the center of everything. Any retailer offering digital gift cards who isn’t thinking in a “mobile first” mode now is falling behind.