Taming the Spread

Taming the Spread Gift cards work for retailers, not consumers. David Leeds has a solution. [pic][pic]Few industries perch as stubbornly inefficient as the gift-card business. Consumers spent $ ascorbic acid billion on cards last year; rough 10% of that pile will expire or go unused. Retailers enjoy the cash float while recipients rue their absentmindedness. compulsion to sell the cards for cash? An intermediary will become a 10% spread. David Leeds aims to change solely that with tango Card. His two-year-old Seattle inauguration attains software that tracks gift-card balances in real time and blasts e-mails about looming expirations. Leeds besides sells tangible dance Cards, which corrupters can redeem for gift cards usable at 11 national retailers, including Starbucks, Home Depot, Gap, REI and Amazon.com. Tango takes an average 10% cut of each card redeemed. (If you buy a $100 Tango Card and put it all with Starbucks, Tango keeps $10 and Starbucks takes the rest.) One big wrinkle: Tango balances not turned into retailer credit can be redeemed for cash or donated to charity. Retailers dont like grownup money back, and they hate losing lift--the extra purchases that consumers tend to make on top of their gift-card haul. The average lift is 40%, marrow that a $100 gift card will closure in $140 in sales.

Partnering with retailers while ruffling their feathers has been a snarly balancing act. Tango has only 5,000 users thus far and nominal revenue. Everybody is fighting against the cash-redemption option, says Leeds, 41. But thats where the business is going. Leeds struck out on his own in 1995, ditching a steady paycheck as a planning manager for printermaker Lexmark and opening a consulting brand in Guangzhou, China to help American companies set up manufacturing plants there. The business sputtered, but Leeds attempt was enough to impress the admissions commissioning at Stanford Business School, from which he graduated in 2000. As the tech market melted, Leeds, with three of his... If you want to get a full essay, order it on our website: Ordercustompaper.com

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