The Gifty Business
How Gifty makes money.
There are multiple opportunities for revenue, including from all parties, in the Gifty system.
Merchants will have two options: Gifty gift cards and the Gifty Small Business Loan Program.
Purchasers and users will not see a difference from their perspective using the app.
PRIMARY REVENUE STREAM:
GIFTY GIFT CARDS
Gifty sells gift cards through the Gifty shop at a percentage discount. This would be similar to how all gift cards are sold.
However, The purchaser does not actually purchase the Gifty card at the original time of purchase. They are actually declaring their intent to purchase in the future with a 100% deposit. Gifty holds the deposit until the time that the purchaser chooses to finalize the purchase. The purchaser wishes to finalize the purchase when the user uses it. Essentially layaway for gift cards.
The purchaser would give Gifty 100% of the value of the card. when the user uses the card, Gifty gives the merchant the agreed-upon percentage of the value.
The card is in a superstate of existing and not existing after the intent to purchase. If the user uses it, it becomes a real gift card. If the user does not use the card during the time limit it is as if the card never existed. Gifty returns most of the original deposit to the purchaser. The purchaser can then use that money to put a deposit down on another Gifty card or put the money back into their bank account.
If the gift card is used in part, it becomes a traditional gift card that falls under the Card act and thus can not expire.
PRIMARY REVENUE STREAM:
GIFTY SMALL BUSINESS LOAN PROGRAM
Gifty gives small business loans to merchants that are paid off through the Gifty card platform.
The Gifty loans will have a set percentage fee and a long term limit.
An example would be: Gifty gives a merchant $10k for $11k in Gifty cards to sell.
The loan is paid back when purchasers buy the gifty cards and the users use them. There would be a limit on how many cards could be sold per merchant. In this case $11k worth. This also creates a sense of exclusivity. Hurry! Only 3 Gifty cards left.
If the gifty card is not used within the time limit the purchaser will get a refund and Gifty can resell that value. This keeps a portion of the loan amount from just sitting in someone’s account and not being used.
Once the full value has been sold and used the loan agreement is complete. The Merchant is free to negotiate a new loan and keep the cycle going.
If Gifty can’t sell the value and/or the full value is not redeemed within the term limit, the remaining balance on the loan is repaid.
Gifty will make the percentage fee regardless if the Gifty platform is successful for a particular merchant.
SECONDARY REVENUE STREAMS
Gifty will be set up as a deposit broker. We will hold money used by the purchasers. This will allow us to generate a very small amount of interest.
Gifty takes a small percent from the purchasers when time limits elapse. When a user doesn’t use the Gifty card within the time limit the purchaser receives a large percentage of the purchase price back. This incentivizes purchasing cards for users that may be unpredictable. Worse case the purchaser gets most of their money back. The percentage is there to encourage the purchasers to remind the users to use the cards.
Gifty cards have a set time limit. Purchasers and users can purchase more time for a small fee.
Users can add any gift card to our system for a small percentage of the gift card value or a flat fee. The added gift card will not be subject to Gifty’s time limit. This is to give users the opportunity to put all of their cards in one easy to use location and bring more users into our system.