share
by Donna M. Airoldi | July 20, 2011

Incentive gift card program managers are responsible for choosing the cards that will best motivate and reward program participants. But with so many cards in the marketplace, how can they tell which ones will be the most successful—and which will become liabilities, like, recently, the Borders gift card?

Looking at the popularity of a company and its national reach is important. But there are other factors to consider when comparing gift cards, and the ScripSmart Gift Card Score is a tool that helps managers and consumers do just that.

“I recognized that there wasn’t a resource when it came to finding out whether a card was a quality gift card or not. There wasn’t even a notion as to what that meant for most consumers,” says Judd Lillestrand, founder of ScripSmart. “Some issuers are quite flexible, some have a bad name, and there’s quite a range in between. The big picture is to provide extra information that helps consumers make a wise decision, and quickly. No one wants to dig through terms and checklists.”

But Lillestrand has. He created a rating system and algorithm for quantifying and comparing the terms and conditions of gift cards, then combed through all the fine print available for individual cards, determined their scores, and wrote up reports on them to add to the ScripSmart.com website. He founded the company in November 2009, but didn’t begin marketing it until this past spring, after he had a chance to build up his inventory to 50 gift card scores. Today, the site lists 596 scores.

Lillestrand looks at 30 different factors, from fees and expiration dates to replacement policies and whether the cards can be managed online. He reviews legal terms and conditions, and companies’ financial statements, too. There even is a section for reviewing cards’ state laws and comparing them to federal laws. Lillestrand calls the companies to verify all the information he finds.

“The Container Store has one of the best cards out there,” says Lillestrand, who used to work in business development for online marketing and accounting software companies. “What makes the difference for tipping it into a high 90s score is whether the company allows consumers to get a cash refund versus a store credit.”

Other top incentive gift cards that make the “best of” list: Bass Pro Shops, Banana Republic, Old Navy, Gap, Starbucks, Target, Disney, Lands’ End, and Bed Bath & Beyond. The list could go on.

ScripSmart has three score levels: green, for cards with scores between 80 and 100; yellow, for those in the 60-to-79 range; and red, for those 59 and below. The site also includes lists of what is good about the cards and what could be better. Lillestrand provides links to each card’s terms, FAQs, and online card-management page. He also breaks out replacement and cash-back details, and provides contact phone numbers and URL links.

ScripSmart also offers lists of top cards for several categories, based on type of retailer as well as end-user. Plus, there’s a “gift card graveyard” list, signified by a tombstone and the date the cards went out of business, and recommendations on which cards to avoid and why, which usually is because the business has filed for Chapter 11 bankruptcy protection or has other financial difficulties.

“When Borders filed for Chapter 11, I sent out a notice to people on my mailing list,” says Lillestrand. Borders announced this week that it was going out of business, so anyone still holding one of its cards best use it right away.

“You can also set up an expiration date alert through the site, called NagMeAlert, which is for people who have gift cards and forget to use them, and it provides an email reminder.”

The site makes money through display advertising and Google Ad Sense, and through commissions for the sale of gift cards. There is no pay-to-play relationship with any issuers, says Lillestrand, and no direct relationships at this point. He’s a one-man gift card marshal.

“The response has been good from gift card managers,” says Lillestrand. “I’ve had interesting conversations about how much costs vary and for what, and about the algorithm. For the most part, they’ve all been positive.”

When asked what the negative responses were, Lillestrand replies: “One gentleman who contacted me didn’t start out very nice, but when he realized that the score wasn’t going to change unless the program did, he quickly turned. One of the beautiful things about the algorithm is that it’s subjective in its design but not in the results. All cards are tested the same way.”