Digital online savings destination RetailMeNot has acquired secondary gift card marketplace GiftCard Zen for $22 million in cash considerations, plus up to an additional $11 million based on specific performance targets and the continued employment of a key employee following the closing date of the transaction.
With the acquisition, RetailMeNot now can display discounted gift cards from more than 700 brands on its site, to complement its offering of digital coupons. The e-Commerce discounts provider seeks to differentiate itself with the move, intending to drive higher user frequency across the company’s mobile app and web sites.
“GiftCard Zen is a great fit with RetailMeNot, as its inventory of discounted gift card content will provide consumers another meaningful way for RetailMeNot to fulfill our mission to help people save money,” said Cotter Cunningham, CEO and Founder of RetailMeNot in a statement. “We expect that GiftCard Zen’s existing operational capabilities and its ability to capture and grow secondary gift card inventory pair well with the power and size of the RetailMeNot audience.”
Instead of just providing consumers with e-Gift cards, RetailMeNot now has the chance to take on a secondary market that is filled with unused cards. In fact, RetailMeNot data indicated that $44 billion in unused, closed loop gift cards had accumulated in the United States between 2008 and 2014. Many shoppers often have cards from retailers they don’t often frequent, or they flat out forget they have money left on them.
With more Millennials turning to online gift cards, RetailMeNot may just have found another way to ensure that its business model further attaches itself to an audience willing to spend its time and money online.
GiftCard Zen will continue to operate out of Phoenix, Ariz., with its existing management team reporting directly into RetailMeNot’s gift card business unit.