LAS VEGAS -- Two enterprising Las Vegans are seeking to make their website the ultimate clearinghouse for consumers who want to purchase gift cards but aren't quite sure which ones to acquire.
Southern California native Judd Lillestrand and class of 2000 Advanced Technologies Academy graduate Russ Smith are the brains behind ScripSmart.com.
The website, which is free for consumers, allows them to search for gift cards by category and also learn which ones are most reliable.
The startup is hoping to tap into a gift card industry that generated an estimated $100 billion in sales nationally last year and is expected to reach $130 billion by 2014, according to the financial services research firm TowerGroup of Boston. The firm also predicted that online gift card purchases will soar from $1 billion last year to $11 billion by 2014.
"What people like about gift cards is that it limits the chance you'll give something that's unwanted," Lillestrand said. "It also gives you the option of a price point, a flexible price point."
On ScripSmart, users who wish to purchase a particular card will be redirected to the websites of those particular retailers. In some cases, ScripSmart earns a commission from the retailer for card sales.
ScripSmart goes the extra distance by grading cards based on their features or lack thereof. Of the 748 cards they have graded, 111 have been awarded the highest rating, a gold medal. There are 177 that have earned the next highest honor, a green medal, and 297 that have been granted the lesser yellow medal.
Then there are the 163 cards that have scored so poorly they have been slapped with a red medal, cards ScripSmart advises shoppers to avoid. Finally, there are 22 that have landed in the "gift card graveyard" because they no longer hold any value.
Gold medals have become so cherished among retailers that major companies such as Bass Pro Shops and Cinemark movie theatres have advertised the ScripSmart honors on their own gift card websites.
An example of a gold medal winner is Cabela, a hunting, fishing and camping gear company. ScripSmart likes that the card never expires, has no hidden fees, has a written gift card replacement policy, offers free shipping, can be consolidated with other cards, and provides card balances online, in the store or toll-free by phone. The card can also be purchased online and is redeemable at all store locations.
ScripSmart gift card reviews can be accessed on mobile devices.
Contrast that with the red medal given to the card issued by the Betsey Johnson women's apparel retailer. The main reason is that the card won't be honored after May 31. Among other minuses, according to ScripSmart, is that the card isn't redeemable online, won't be replaced if lost or stolen, cannot be consolidated with other cards and isn't refundable. Other red medals have gone to retailers that are in bankruptcy or that ScripSmart believes are financially unstable.
"Overall the reception from the industry to our scoring has been positive but there are some companies that aren't happy," Lillestrand said. "We may have incomplete data at times because we're human."
Judd Lillestrand and Russ Smith works on ScripSmart at the new CoBiz coworking space.
But Lillestrand, who operates from a desk at the CoBiz coworking space at 6445 S. Tenaya Way, said he didn't change ratings for two retailers who objected the most because they couldn't prove that his scores were based on bad information.
"Our goal is to become the most trusted consumer brand in gift cards," he said. "We think there's also an opportunity to help companies issue gift cards."
The website also issues letter grades to each of the states based on the consumer friendliness of their gift card laws. Nevada received a failing grade because a $1 fee may be charged one year after the date of purchase, there are no limits on when a retailer can have a card expire, merchants aren't required to give cash back, and the state doesn't maintain a consumer web page dedicated to gift card laws.
There are 28 other states that also received failing grades.
"I don't think most states understand how many consumers are buying gift cards," Lillestrand said. "It would be nice if the states and the federal government prevented things like fees from being charged."