As far as your idea to launch a gift card exchange (which is a good one – my company offers a gift card swap forum among our members), it’s much more difficult than most expect to provide a fraud-free environment where people trust that they aren’t going to be taken advantage of. Security and privacy practices are getting better and stronger as time goes on, but it can be much more complicated than expected to implement.

I hope I’ve answered your questions and please don’t hesitate to respond if you have any further questions!

This layoff was regrettable, but necessary, to ensure our ability to continue to provide the high level of service and support that our customers and partners have come to expect. We have extended everyone affected by the layoff an offer to work with us on a contract basis as needed since the holidays are a very busy time for the company. While the layoff does have an effect on the pace of our overall development, the site is alive and healthy, it has more features than ever, and new features will continue to roll out over the next weeks and months.

Leverage’s online gift card, loyalty, and promotional services continue to deliver industry-leading value, convenience and protection for consumers, and provide a unique marketing opportunity that maximizes ROI for our merchant partners. In addition, investors continue to view Leverage and its unique business model as strong and viable. We expect to receive our next round of funding in Q1 2009, at which time we anticipate an even more rapid expansion of our operations.

Then there was the interest they promised on unused card balances. They’d need a good level of activity to support that. The website is still up – check it out. http://www.leveragecard.com

Since not many people knew of Leverage then there was probably not much activity, causing those that did sign up to lose interest.

1. People give/get gift cards
2. Lots of people never use them and they expire
3. People would sell their unwanted cards for money

I haven’t thought about this in-depth but isn’t hard to implement a shopping cart for this and the only real issue is card authenticity and ensuring a trusted exchange.

Is it purely a marketing problem?

Would be great to hear from someone at one of these companies. Reply here or email me (click the link in my name).

But, as J-Cal says, it’s all about execution. The “let’s provide a platform for swapping stuff and charge a tiny commission” model worked well for Lala, but I guess they’ve moved on, too.