Gift cards for cash – an emerging industry - wave3.com-Louisville News, Weather & Sports

Gift cards for cash – an emerging industry

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LOUISVILLE, KY (WAVE) – One popped up on Preston Street. It's a store with no name, just a big banner which reads "We buy gift cards." It doesn't open until 5 p.m. on weekdays. So I went in with two gift cards. 

"Starbucks, I'll give you 50%," the woman behind the counter offered. She offered to pay me 50% of a Bed, Bath and Beyond gift card as well. But a woman who went in after me got a better deal. She said she received 63% of the Home Depot card value in cash.

"This is my first time," she said. "On $108, I got $64."

I asked her if it's worth it.

"Not really but it is the most anybody around here will pay," she said. Then, she told me the payout rate was about to change.

"I recommend it for this weekend, but after this weekend it's only 50 percent. I guess Christmas or something. I don't know why," she said.

Action Loan downtown also buys gift cards. The worker behind the counter offered me $15 cash for $25 cards. She said 62% is the highest rate they pay on gift cards. 

"Frankly I had not heard a lot about it until we got this inquiry," said Charlie Mattingly of the Better Business Bureau. He knew of this practice online, but didn't know they are doing it out of stores now in Louisville. Mattingly says it's not illegal, and no complaints have been filed here. 

"It's typically going to target lower income consumers who are desperate for quick cash. Nothing necessarily wrong with that except it's kind of the same audience that payday lenders typically target. There's a certain exploitation that exists in some of this that is a little problematic," he said. 

He couldn't answer our other questions, like why the payouts keep changing, how they know the cards aren't stolen, and what happens to the cards after they're purchased for cash.  

"I don't know, I only work here," said the worker on Preston. 

"Does it matter? I don't know," said the Action Loan employee. 

When I asked to talk to Action Loan owner Gus Goldsmith about how his gift card buying business works, he said "I don't like to do interviews." 

Blake Goldsmith, who runs the store on Preston, cancelled an interview after I sent him the questions at his request.

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