Amidst the busy holiday shopping season, multiple independent Saskatchewan businesses discovered they were listed on a U.S.-based gift website without permission or notice.
Sylvia Kreutzer and her husband Dean have owned Over the Hill Orchards and Winery in Lumsden, Sask. — roughly 28 kilometres northwest of Regina — for more than 25 years.
She says the pair have worked hard to build their name and reputation within Saskatchewan. The winery does not use third-party advertising and carefully chooses who to go into business with, prioritizing local partnerships.
Learning their business was listed on U.S.-based Giftly’s website without consent was a “gut punch,” Kreutzer said.
“These people just used our name and used our company for their own marketing purposes,” she said.
The words “gift card” appear multiple times on Giftly’s site, but CEO and founder Timothy Bentley says the company does not sell merchant gift cards.
Instead, “Giftly is a person-to-person gifting platform,” Bentley said.
Recipients receive the money directly, “along with a suggestion” of where to spend it, and pay like regular customers if they chose to go to a suggested business, he said.
Giftly charges a processing fee for sales, but the money sent to recipients never “expires.”
Kreutzer said she was worried her customers could be “taken advantage of” by the platform or potentially lose money, thinking they were purchasing a gift card that could be redeemed at their winery through Giftly.
“That wasn’t something that was distributed by us and we have no format for recourse on this,” she said.
The winery does sell gift cards, but only over the phone or in-person at the orchard, delivering or mailing the paper gift cards directly to recipients.
Over the Hill Orchards and Winery was removed from Giftly upon request, but Kreutzer said they were left “completely disappointed” by the whole process and never told if Giftly sold products linked to their name.
“We would be crushed to disappoint some of our very loyal customers,” she said.
Canada is not Giftly’s intended market and the company is not deliberately selling to Canadians, Bentley told CBC News. According to the company’s terms and conditions, you must be based in the United States to use the service.
Any Canadian businesses on Giftly were not intentionally listed, but a byproduct of the website being populated using third-party business directories, he said.
“Those directories include businesses outside the U.S., including Canada,” Bentley said.
According to Giftly’s website, a “page will automatically generate on Giftly,” once a business has at least one review on Yelp.
CBC found more than 100 listings for businesses based in Canada on Giftly’s site, including Regina’s Cornwall Centre Mall, numerous restaurants in various cities and even Toronto’s public transit system.
Bentley says no company logos are supposed to appear on the website, as the third-party services the company works with are supposed to scrub those images. But according to an Instagram post from Regina’s Italian Star Deli, their company’s logo appeared on the site without their permission.
“That was definitely a mistake,” Bentley said, adding Giftly wants to be notified of such instances so the content can be removed.
Any business can request to be removed from the site, and its page will be taken down, he said.
‘Opt out instead of opt in’
University of Manitoba’s head of computer science David Gerhard says Gifty is essentially “aggregating information that’s already public online,” which is legal, but the company’s “opt out instead of opt in” business model is not how things are typically done.
He says businesses are generally used to reaching out to a company of their choosing for advertising, not being automatically included in indexes and then having to opt out later.
“I think the big challenge here is that it is a slightly different kind of an interaction than people are used to,” said Gerhard, whose work deals with societal reactions to computational trends.
Names, products and services of businesses and companies are listed on Giftly without consent, but “there is no real connection between” the listed merchants and recipients receiving money sent through the site, he said.
It also might not be obvious to customers that the site does not sell traditional gift cards, he said.
“I think that a consumer that goes to Giftly seems to be marketed a gift card and they think they’re buying a gift card, because all over the website, it says ‘gift card,’” Gerhard said.
“To me, that’s the thing that is deceptive here.”
Giftly CEO Bentley says that while they sell a “comparable product” to gift cards, they try to make it clear that customers are not getting a traditional merchant gift card and recipients get clear redemption instructions.
Despite that, according to court filings from a 2023 class action lawsuit filed against Giftly by several American small businesses listed on the site without consent, “confused consumers regularly” showed up at businesses trying to redeem Giftly cards.
The lawsuit, which was settled through a negotiated settlement, alleged that the businesses were then left to deal with upset or confused customers whose negative experience could harm their reputations. Giftly agreed to pay for additional advertising for the merchants and businesses affected.
Not just a monetary cost
Retail strategist David Ian Gray says that even if there is not much “monetary impact” from a third-party using an independent businesses’ name, that situation can still be “very scary and stressful.”
“You don’t know what it’s about, you now have to take time out of your day to investigate,” Gray said.
That distraction is difficult for often smaller, family-owned businesses which are working long hours just to run their business, especially at an already-busy time of year, he said.
“It’s detrimental to running a good business,” Gray said.
