Coinstar Testing Gift Card Exchange Kiosks2 Jan, 2013 By: Erik Gruenwedel, Chris Tribbey
Coinstar has begun testing kiosks that allow consumers to cash in new and used holiday gift cards.
Bellevue, Wash.-based Coinstar, which owns and operates Redbox, Seattle’s Best coffee kiosks, consumer electronics recycling kiosks and its signature coin trading units, last quarter launched Alula kiosks in 21 Giant Eagle supermarkets in central Ohio.
Gift cards, which are offered by myriad retailers, typically are not redeemable for cash from the original vendor. Coinstar sees a niche market for unused gift cards as a means of generating incremental revenue while offering a cash option to consumers.
Specifically, Alula accepts gift cards from about 170 retailers, including Best Buy, Target, Home Depot, Starbucks, Apple Store, AMC Theatres, REI, Denny’s, FYE, Sears, and Walmart, among others.
The amount refunded in cash to consumers depends on the type of gift card and is primarily driven by how easily that gift card can be resold to another consumer.
For example, a gift card to a grocery store, gas station, or mass merchant is more desirable than a smaller or specialty retailer. The card holder can typically expect to receive 65%-85% of face value on one of these cards, according to Alula.
Gift cards redeemed by Alula are resold at a discount through other channels and partners. The company reportedly has generated about $150,000 in revenue since launching the Ohio test in September, according to a spokesperson.