A new gift-card service available to the retail industry is hoping to benefit businesses, customers, and nonprofit organizations in what it is calling a “win-win-win” deal.

Biddees is an upstart online service where customers “bid” on lower prices for prepaid cards to retail companies.

“[It’s a] reverse auction where nonprofit organizations and charities can really make money,” says Biddees CEO Steve Adler, noting that the “win” for nonprofits is the 15 percent of each Little Biddee Thing—the official “bids” from customers—that goes to the nonprofit of the customer’s choice.

The service works like this: Customers purchase 99-cent Little Biddee Things, each of which give the customer the ability to see the price of an available prepaid card. Every time a price is viewed, it’s knocked down 50 cents.

The customer, after viewing the price, has the choice of purchasing the prepaid card at that value, or hoping that the price continues to be driven down by other Biddees users.

“All of our auctions start at 98.50 [percent of face value], so when you first go on there and you use a Little Biddee Thing, the worst case you’re going to have is the ability to get the card for $2 less or whatever the face value is,” Adler says.

“At the same time, they’re giving to the nonprofit,” he says of the “win” scored by the customer.

Starbucks and Jamba Juice are two quick serves that have already gotten on board with Biddees; Jamba Juice is offering $50 gift cards, while Starbucks is offering $25, $50, and $100 deals.

Adler says prepaid-card services like Biddees are good marketing strategies because customers with the cards often spend up to 25 percent more at that store than the card is worth.

“Plus, it’s directed right to their store,” Adler says. “It’s the up-sell and it’s customer loyalty wrapped into one.”

Adler says he got involved with Biddees because he recognized the growing market for prepaid cards, which he said are quickly becoming a preferred payment of choice for younger demographics.

The appeal of giving back to nonprofit organizations—an angle of Biddees started by founder Barry Shore that Adler confesses wasn’t necessary to make the service operate successfully—was another factor that Adler was drawn to.

“It’s really the core culture of the business, is finding a way to give back, and … harnessing that where you have a company that actually makes money, and gives back at the same time,” he says.

By Sam Oches

Charitable Giving, News, Jamba Juice, Starbucks