Buyatab and the Growth of Electronic Gift Cards
Matias Marquez turned his electronic solution to gift giving into Buyatab, a company that benefits consumers, brands, and distributors, and catapulted his company to No. 3 overall on the 2016 PROFIT 500 list of Canada’s Fastest-Growing Companies, earning him the title ‘Entrepreneur of the Year, Pacific, 2016.’
Eight years ago Matias Marquez had a problem. The then 21-year old Simon Fraser University business student wanted to send a gift card to a friend who lived halfway across the country and felt frustrated there was no way to get it to its destination in a timely manner. If only there was a way to send one electronically, he mused. Well, back then there just wasn’t a way, but thanks to his high-tech digital problem solving skills, now there is.
“So after I got the idea,” he says, “I started meeting with brands and I’d ask them, ‘why don’t you have electronic gift cards?’ Typically their response was, ‘we’d love to be able to do that,’ and so I thought, let me supply you with some tools to do it.”
There’s an old adage to the effect that, ‘you can’t please everyone,’ but it turns out that Buyatab is the exception. Electronic gift cards provide convenience and solve problems for consumers like the one Marquez faced eight years ago; they increase sales and hence profit margins for brands, and they make distributors’ lives less complicated since they don’t have to maintain an inventory of plastic cards and mail them out.
Together, consumers, brands, and distributors have turned Buyatab into a major success story, making it the third fastest growing company in Canada and allowing it to become competitive in the U.S. and gain a toehold in the European market.
How eGift cards work
For consumers, it’s literally as easy as touching the screen or clicking the mouse. They only have to go the website of the brand they want to give – Hyatt Hotels, Bliss Spa, Whole Foods Market, et cetera – click on ‘Gift Cards’ and up comes an application form enabling the company to offer their customers digital gift cards which are paid for electronically.
As soon as the payment is accepted, it appears in the recipient’s mobile device. It can then be stored on Apple Pay or Android Pay and all the recipient has to do is show their phone and the card will be debited; for example, if a person receives a $100 gift card to dine at The Keg and spends $55, the card will show the balance which can be used next time. There are no hidden fees; a $100 dollar card entitles the recipient to products valued at $100. There’s also no expiry date, and if the recipient doesn’t have a mobile device, the card can simply be received on a PC and printed.
Why brands love eGift cards
What’s not to love about seeing an increase in gift card transactions by 92 percent? That is what Fairmont Hotels & Resorts experienced in their first year with Buyatab, while simultaneously enhancing their brand loyalty and exposure with every gift card purchase. Meanwhile, Cineplex, one of Canada’s leading entertainment companies (cinema, food service, and gaming) with 162 theatres across the country, saw a 20 percent increase in their first year after the company took the opportunity to leverage eGift cards with their current plastic gift cards.
But it’s not only national and international companies such as Saks OFF FIFTH, Lord & Taylor, Four Seasons Hotels, Roots, HomeSense, Whole Foods Market, Home Hardware, Tim Hortons, and Hudson’s Bay, and chains such as Harvey’s, Moxie’s, and Boston Pizza who are getting on board with eGifting. St. Elmo Steak House, which has been in business in Indianapolis since 1902 and has become a ‘destination restaurant,’ saw an overall increase in their gift card sales of nearly 40 percent in the first month after they launched the program.
Buyatab’s website lists over 100 leading brands currently expanding their business with the electronic cards. At time of writing, Marquez was flying out to Toronto for a business meeting and from there to Omaha for an industry conference where he would be speaking. More and more merchants are interested in eGift cards and what Buyatab can do for them. It’s not only increased sales, he points out, which of course is the bottom line; merchants also appreciate the dedicated, seven-day-a-week customer support the company provides, the 100 percent fraud liability protection, the seamless mobile integration, and the flexibility to deliver online gifting tailored to specific needs.
Why distributors are excited
The third partners in the Buyatab success story are the large distributors who can benefit from the comprehensive online solution for high-volume gift card purchases. Whether in the business of loyalty cards, incentive marketing, employee rewards, or another sector, the Distributor Solutions department will help by simplifying the purchasing process through one API (Application Programming Interface) connection which gives access to one of the most comprehensive catalogues for high-demand digital cards available in the marketplace. This eliminates the cost associated with the need to integrate directly with individual brands and multiple processors. It also eliminates the need to maintain a costly inventory of plastic cards, which could become obsolete should the brand redesign their logo, for example. It also eliminates the cost of handling and shipping.
With eGift cards, it’s possible to place orders on demand, and that order can be as big or as small as the client requests. Not only can the size of the order be small; with this system it also now makes financial sense, for example, to electronically distribute $5 cards to quick serve restaurants such as Tim Horton’s. By removing shipping charges, what Marquez calls ‘micro-payments,’ become viable options. As well, Buyatab’s web portal gives the distributor access to comprehensive real-time activity on all transactions, and enables them to track individual orders, reissue gift cards, and perform many more useful functions.
Behind the scenes at Buyatab
The simple elegance of the electronic gift card, while easy and convenient for consumers, brands, and distributors, has its foundations on some cutting edge software developed internally in Vancouver at Buyatab headquarters, “by our great team of 56, which include highly skilled individuals in all aspects of our business,” says Marquez. “It’s a complex web and there’s a lot behind it taking all the complicated pieces and putting them together to make it very simple for consumers. Security is a big thing when taking payments online and we guarantee it for our partners and that’s paramount for us.”
But while the Buyatab team takes what they do very seriously, it’s also a place where they enjoy coming to work. “It’s a really cool place to be,” Marquez says, commenting on the positive work environment. “I would consider everyone here friends and family. We really like what we do and try to promote a fun atmosphere. We have regular events and a lot of the staff participates in our ping pong and foosball tables and video games. Dogs can come to work too, because a dog-friendly environment has therapeutic benefits.” His own dog, Draper – half-pug, half-Boston terrier – was the first, and now leads four others around the office.
Wanting to promote a health-conscious environment for its employees, the company has fresh fruit deliveries come twice a week to the office. Buyatab also offers the option of standing desks, with about half of the staff choosing them. “Sitting is the new smoking,” Marquez says. “It has bad effects on the body, while standing has long-term health benefits, so anyone who wants a standing desk gets one.”
There’s no doubt, a positive and supportive work environment combined with a winning business model has put this company on the fast track to success.