During the height of the holiday shopping season, several independent Saskatchewan businesses discovered they had been listed on a US gift site without permission or notification.
Sylvia Kreutzer and her husband Dean own Over the Hill Gardens and Winery in Lumsden, Sask. — about 28 kilometers northwest of Regina — for more than 25 years.
She says the couple has worked hard to build their name and reputation in Saskatchewan. The winery does not use third-party advertising and carefully selects who it does business with, prioritizing local partnerships.
Finding out that their business had been listed on US website Giftly without consent was a “kick in the gut”, Kreutzer said.
“These people were simply using our name and our company for their own marketing purposes,” she said.
The words “gift card” appear several times on Giftly's website, but CEO and founder Timothy Bentley says the company doesn't sell gift cards.
Instead, “Giftly is a personal gifting platform,” Bentley said.
Recipients receive the money directly, “along with a suggestion” on where to spend it, and pay like regular customers if they decide to go to the suggested business, he said.
During the busy holiday shopping season, some Saskatchewan businesses found their names posted on a US gifting website without notice or consent. One Lumsden winery says the listing was not needed or desired.
Giftly charges a sales processing fee, but the money sent to recipients never expires.
Kreutzer said she was concerned that her customers could be “taken advantage of” by the platform or potentially lose money by thinking they were buying a gift card that could be redeemed at their winery through Giftly.
“This is not something we have distributed and we do not have a form to contact about this,” she said.
The winery sells gift cards, but only over the phone or in person at the garden, delivering or mailing paper gift cards directly to recipients.
Over the Hill Orchards and Winery was removed from Giftly upon request, but Kreutzer said they were left “totally disappointed” with the entire process and never revealed whether Giftly sold products associated with their name.
“We would be disappointed if we disappointed some of our very loyal customers,” she said.
Canada is not Giftly's target market and the company does not intentionally market to Canadians, Bentley told CBC News. According to the company's terms and conditions, you must be located in the United States to use the service.
Any Canadian businesses on Giftly were not listed intentionally, but were a byproduct of populating the website using third-party business directories, he said.
“These directories include businesses outside the United States, including Canada,” Bentley said.
According to Giftly's website, “a page will be automatically created on Giftly” once the company posts at least one review on Yelp.
CBC found more than 100 listings on Giftly's website for businesses based in Canada, including Regin's Cornwall Center shopping mall, numerous restaurants in various cities and even Toronto's public transit system.
Bentley says the website should not include company logos because the third-party services it partners with must remove those images. But according to an Instagram post from Italian Star Deli Regina, their company logo appeared on the site without their permission.
“This was definitely a mistake,” Bentley said, adding that Giftly wants to be notified of such incidents so the content can be removed.
According to him, any company can request removal from the site, and its page will be deleted.
“Refuse to participate instead of agreeing”
University of Manitoba computer science department head David Gerhard says Gifty essentially “aggregates information that is already publicly available on the Internet,” which is legal, but the company's “opt-out versus opt-in” business model isn't how things are typically done.
He says companies tend to be accustomed to advertising to a company of their choice rather than automatically being included in indexes and then having to drop them later.
“I think the big challenge here is that this is a slightly different kind of interaction than what people are used to,” said Gerhard, whose work focuses on societal responses to computing trends.
The 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 the recipients receiving money sent through the site, he said.
It also may not be obvious to customers that the site doesn't sell traditional gift cards, he said.
“I think the consumer who comes to Giftly is selling a gift card, and they think they're buying a gift card because it says 'gift card' all over the website,” Gerhard said.
“To me, that’s what’s deceptive here.”
Giftly CEO Bentley says that while they sell a “comparable product” to gift cards, they are careful to make it clear that buyers do not receive traditional merchant gift cards, and recipients receive clear instructions on how to use them.
Despite this, according to court filings from a 2023 class action lawsuit brought 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 negotiations, alleged that the companies had to deal with upset or confused customers whose negative experiences could damage their reputations. Giftley agreed to pay for additional advertising for affected merchants and businesses.
Not just cash costs
Retail strategist David Ian Gray says that even if a third party using an independent company's name wouldn't have much of a “monetary impact,” the situation could still be “very scary and stressful.”
“You don’t know what it’s all about, now you have to take the time to investigate,” Gray said.
That kind of distraction is difficult for often small, family-owned businesses that work long hours just to run their business, especially during an already busy time of year, he said.
“It’s detrimental to running a good business,” Gray said.
