Gift Cards Serve As Bridge From Bitcoin For Retailers
While the list of methods for obtaining cash for bitcoins dwindles following recent regulatory actions that took out a number of digital currency exchanges another list is growing — the list of retailers and online e-commerce stores whose gift cards can be purchased with bitcoins.
- Foodler accepts Bitcoin payment to buy Foodler Credits which then can be used instantly (via web or iPhone mobile) to purchase from over 12,000 restaurants in the U.S.
– The exchange rate for purchasing Credits using Bitcoin is the current market exchange rate. There is even a FrequentFoodler loyalty program offered.
- Gyft is a mobile gift e-card mobile app and website which enables Bitcoins to be used for instantly purchasing e-cards that can be used at over 50,000 retail locations in the U.S.
The list includes Brookstone, Lowe’s, GAP, Sephora, Gamestop, American Eagle, Nike, Marriott, Burger King and Fandango.
– The exchange rate for purchasing e-cards using Bitcoin is the current market exchange rate. For those not using a smartphone the e-cards can be printed out and then scanned or entered by the clerk at the checkout counter. For those wishing for improved transaction privacy the Gyft website can be accessed using Tor. (Yes, this allows Gyft cards to be used anonymously, like cash).
- eGifter.com now accepts Bitcoin as payment for physical gift cards and e-gift cards.
- GiftCardZen now accepts Bitcoin as payment for physical gift cards and e-gift cards. They buy their inventory from gift card recipients who traded their cards in for cards from other retailers and can therefore sell them at a discount to the face value.
- GiftsForCoins.com accepts Bitcoin as payment for physical gift cards to retail merchants such as Best Buy and Home Depot, restaurants from Chilis to Del Taco, gas stations Chevron and Shell, and e-commerce site Dell. The exchange rate offered when paying with Bitcoin can vary from the market exchange rate depending on recent volatility but is oftentimes very close to the current market rate.
- GiftCardBTC.com sells Amazon gift e-cards with payment in Bitcoin. A premium is paid though as the exchange rate offered when paying with Bitcoin is about 5% below the current Bitcoin market exchange rate.
- BitcoinCodes sells Microsoft (XBox Live) Points, PSN value, Nintendo points, EVE Online, World of Warcraft (WoW) and more for Bitcoins.
- IcedMocha accepts Bitcoin payment for digital gift e-cards for Starbucks (UK only, for now).
- Lyoness sells physical gift cards for dozens of national brands in the U.S. and also sells mobile vouchers (e-cards) for instant payment at thousands of local retailers.
The Lyoness brand offers merchant loyalty programs globally but the only path from Bitcoin to the gift cards is in the U.S. thanks to Dwolla, which is one of the methods to add funds to a Lyoness account. Bitcoins can be cashed out to USDs through Camp BX exchange and then withdrawn as Dwolla — no bank account is needed.
Registering for a Lyoness account requires a referrer, obtained either by visiting one of the Lyoness merchants designated as an SME Merchant or by requesting a referral from another Lyoness member such as Bitcoiner EndTheFed321. Full disclosure: Your referrer will receive cash back (commission) on each gift card you purchase from Lyoness.
- Individual retailers who already offer gift cards may accept Bitcoin as payment without formally offering it. Vancouver’s Bestie Curryworks, for instance, will accept Bitcoin payment for its gift card made by customers who visit in-person but the payment method isn’t offered through their website.
For online e-Commerce orders, another method becoming increasingly more popular is the payment service BitSpend.net which essentially places your order for you and then pays for the order with their own credit card (fee varies from $2 for orders $50 and under to $5 for orders over $250). A slightly similar service BTCInstant.com will let bitcoins purchase a Virtual Mastercard for use at the online merchant that you specify when placing the order (fee of $7.95 per card).
One of the benefits of purchasing a gift card denominated in fiat is that the card’s purchasing power (in terms of dollars) then won’t fluctuate. This allows a person who wishes to protect against any potential future drop in the Bitcoin exchange rate to lock in the purchasing power at a certain level even if the value on the card won’t be spent until a later point in time.
With multiple inexpensive methods for cashing out bitcoins to gift cards there remain many ways in which no bank account is needed to be able to spend the value from your bitcoins.
Of course, it would be so much easier if more merchants were to simply begin accepting bitcoins for payment either directly or through a Bitcoin payment processor. That day will come, but the ability to exchange to gift card is a stopgap measure that is useful today.
[Update: Added eGifter.com in August, 2013]