I recently came across the Gift Card Trader iPhone app, on sale for $4.99 in the iTunes app store.

They are more like a Craigslist for gift cards than a true secondary marketplace, like Plastic Jungle or Gift Card Rescue.  The GiftCard Trader app allows anyone to list their gift card for sale, along with an address the transaction can be done in person.  Buyers can search for a gift card that is located for sale near them.  The idea is that, you are about to go shopping at Home Depot and you check to see if you can pick up a heavily discounted Home Depot gift card on the way there.

There are a number of problems with this business model:

1. As I’ve mentioned a number of times, Craigslist is simply not a safe place to buy and sell gift cards; there is too high a likelihood of fraud and/or robbery if the value of the card is high enough.  In this sense, GiftCard Trader is no better.
2. I seriously doubt that people will want to pay a fee for an app like this when there are so many good services already, some of which are bound to come out with iPhone/Android/Blackberry apps in the near future, that will be free and tied to a much safer way to transact.
3. As with most new gift card secondary marketplaces, there were ZERO available gift cards in my area, and I am surrounded by about 5 million people.
4. I just wrote about a new type of scam involving the scalping of gift cards in front of stores.  Because there is no way to verify the amount on a gift card at the moment you are purchasing it, you could easily pay $100 for a $0 value gift card.  This model just isn’t safe.

I like the novelty of the idea, and the app appears to be simple and well-written, but the premise behind it has some serious problems.