Imagining an online marketplace where consumers could immediately sell unwanted gift cards and buy others at a discounted rate, Ackerman and Bohm believed that this untapped market—in 2014, for instance, close to $1 billion in gift cards went unused—could be an industry with a lot of potential. It turns out that they were right.
Before diving headfirst into this new venture, they ensured they were working to solve a problem that actually existed by spending time exploring every vertical. To make the dream a reality, they would need capital, an e-commerce website, and fraud protection.
With an initial personal investment of only $2,000, they enlisted the help of a freelance developer to create a basic, e-commerce website. Once launched, they focused on generating media coverage for exposure. Without making any investments on marketing efforts, CardCash.com handled more than $1 million in gift card transactions its first year.
From these humble beginnings as a basement startup to the current state as one of Forbes’ 100 Most Promising Companies, CardCash.com has experienced significant growth—both internally and externally.
Industry Pioneers Blazing the Trail to Success
According to co-founder and CEO Bohm, effective growth is grounded in your execution.
“It’s really about being on top of your game and being sure that, whatever you do, you execute properly. If you don’t grow 100% year to year, that’s fine. If you don’t execute properly, that’s not fine,” says Bohm.
CardCash.com experienced this firsthand when competitors began cropping up around the country. One of those, a Silicon Valley startup named Plastic Jungle, raised more than $30 million in venture capital funding while garnering plenty of attention about their business. By focusing on creating buzz more than developing their core product and service offering, Bohm says the company quickly burned through their capital. CardCash.com moved in to acquire them in 2014.
“You have to build a company slowly and you have to build a company smartly. Ultimately, [Plastic Jungle] was an eye-opener that we can’t get distracted. We can’t start looking at what other people are doing,” Bohm says.
In fact, Bohm often reminds himself and his team to not direct their attention toward new, rising competitors—focusing instead on creating the best possible customer experience. He credits CardCash.com’s success to this discipline and practice. By providing a secure, simple-to-use service, Bohm wants to prove to consumers there’s no reason not to shop on CardCash.com.
At present, consumers are able to utilize the service with more than 1,000 American retail brands for physical gift cards, while 250 retailers are set up for mobile gift card transactions on CardCash.com. The company also boasts partnerships with many nationwide companies—such as CVS®, United Airlines®, and other B2B brands—to raise awareness.
This, Bohm explains, is second only to technology as the core focus of the company.
“People on the street likely don’t know this industry exists, but if you ask, they probably have two to three unused gift cards at home,” he explains.
So far, their efforts to boost awareness—whether it’s through media coverage, word of mouth, or those partnership endorsements—have paid off. Currently, around 70% of revenue comes from repeat business. While Bohm is hopeful that they’ll continue to generate new sales, he’s also pleased to have a solid base of happy returning customers.
Technology Inside and Out
With a passionate in-house development team, CardCash.com is able to keep ahead of the technology curve in order to improve existing technologies and prepare for shifts in the industry and consumer behavior.
“Staying ahead really comes down to your team. You need a team that’s very passionate and very informed on technology,” Bohm explains. “Often people hire outside development teams, but they’re not living and breathing your core business. It might be somewhat cheaper, but at the end of the day, you’re not going to see that good and secure product.”
CardCash.com’s technology department focuses on two main aspects of business: The experience and internal operations.
Consumer Access & Protection
Their e-commerce site, mobile-responsive app, and informative blog are some of the ways CardCash.com has streamlined their online experience for ease of use—while also delivering attractive design and useful information. With the shift to e-gift cards, Bohm’s team has also focused on fraud protection to ensure gift cards and payment methods are vetted and secure. This not only gives consumers peace of mind when conducting business on CardCash.com, but also protects the company’s inventory and assets.
Internal Evaluation & Refinement
In-house, Bohm and Ackerman have hired product developers to observe and interview each department. They explore tasks and technology to gauge whether or not existing practices are effective. If processes or practices are found to hinder productivity, they devise ways to improve and streamline them. Just this year alone, such operational evaluations have helped CardCash.com nearly double their volume from the previous year while cutting payroll costs by 10%.
This practice of constantly evaluating internal and external systems, Bohm explains, follows CardCash.com’s intent to remove as much friction from the consumer experience as possible. That includes paying cash to customers up front.
A Sterling Experience
Unlike online auction sites, where customers wait for product bids and purchases, CardCash.com immediately pays once the transaction has been approved. This, Bohm explains, reduces friction in the selling process. In order to finance this policy and foster the rapid inventory turnover they see with their site (with some items purchased within minutes or others within the week), CardCash.com turned to Sterling National Bank’s inventory financing program.
“They’ve been a great partner,” Bohm says.
In addition to inventory financing, CardCash.com uses Sterling’s online banking services and Automated Clearing House program to pay sellers. “We’re very impressed with the online cash management side,” Bohm says. “Their online platform is easy to use and they’re also receptive to new ideas. If there’s something we can’t do, they try to figure out a way to accommodate us.”
What’s Next? The Bigger Picture
Moving forward, Bohm continues to focus as much on finding ways for consumers to save money as he does on supporting his team. Not only does CardCash.com aim to ensure that consumers are paid on time, but also that customers receive great service—getting what they want, when they want it—even with significant savings.
“The rising cost of a living with our economy—it’s challenging. There are many people who have a hard time making it,” he says. “Some customers send personal, hand-written letters. There’s nothing more satisfying than that.”
Meet Elliot Bohm
With a master’s degree in education, Bohm always enjoyed making a difference in people’s lives. Yet while being a teacher and professor was interesting and exciting, he sensed there was more opportunity to be found in starting a business—especially one like CardCash.com.
Having always considered himself an entrepreneur, Bohm felt passionate about finding ways for people to save money. At only 25 years old, he and Ackerman built CardCash.com and became focused and passionate about turning it into a sustainable company offering discounts, providing a positive shopping experience, and supporting an internal team that always works toward success and progress.
A New Look at Gift Cards
Through its partnership with CVS®, CardCash.com is pioneering a program where major retailers agree to accept competitor’s gift cards. Going through CardCash.com, a consumer can, for example, enter CVS® with a gift card from Walgreens®, Applebee’s®, or another retailer, and trade it in for a CVS® gift card.
Until this shift is complete, retailers still remain pleased with consumers’ use of CardCash.com, since it increases the likelihood that gift cards will be used—and money spent. In the current system, retailers consider gift cards to be a deficit on their books until that amount is spent in-store. When gift cards go unused, that “deficit” remains. Thanks to CardCash.com, however, consumers are able to get gift cards they want—and will use—for less than face value, while the total amount is still spent in the store.
“It’s a win-win situation,” Bohm says. “Everyone walks away happy.”