PayPal users that also have a gift card they want to convert to cash, will find this new service from Plastic Jungle interesting, assuming the cost isn’t too high. Plastic Jungle has built an application using PayPal’s new Adaptive Payments APIs that enables U.S. cardholders to sell their gift cards to Plastic Jungle. This may give Plastic Jungle a competitive edge in the gift card secondary market, if enough PayPal users can find better uses for the balances on their gift cards than redeeming the cards. Price sensitivity will likely be an issue for these consumers, however.
In the coming months, Plastic Jungle customers will also be able to sell their gift cards and receive funds transferred into their PayPal account balance directly on the Plastic Jungle website.
Gift cards that are converted into a PayPal balance are then resold on the Plastic Jungle marketplace to motivated shoppers, allowing merchants to connect with their most productive customers in new and innovative ways.
The challenges here is that the Plastic Jungle service fee starts at 8% and goes higher. How high isn’t specified, however one assumes the service charge is closely related to the effort required for Plastic Jungle to validate the balance and receive the funds from the merchant. Since the number of card exchange sites are growing, merchant issuers will need to decide to what degree they will participate in this service, what they will charge for their assistance, and which exchange sites they will directly support.