Three students at the University of Waterloo's VeloCity Residence have just unveiled a site called Giftah that makes it easier to buy, sell or trade unwanted gift cards. It would seem that their timing couldn't be better. Gift cards are always a hot stocking stuffer and inevitably we end up with ones from stores that aren't places we'd normally choose to shop at.

But cruising the site on the first day after Christmas, I'm a bit underwhelmed that there are only seven listings so far. The most appealing is a $25 card at the LCBO selling for $20. Or maybe the $20 iTunes music card with a current asking price of $17. Some cards aren't even Canadian. Otherwise, I'd be all over the $50 Target card that has a bid of $18.

Launched on December 22nd, Giftah is obviously just at its early stages so it will take some time to build up critical mass and a marketplace filled with more than a handful of participants. But the design is clean and the site generally easy to use and navigate so it's something that definitely has potential.

Earlier today I connected with Rez Bajraktari, one of the site's three founders. Here are some excerpts from our brief Q&A:

From what I can tell you guys are creating the marketplace but all transactions are actually handled privately between the buyer and seller. Sort of like Craigslist. Is that right?

At the current moment the transactions are handled between the buyer and the seller themselves. We are going to introduce another option very shortly for cards that carry higher values - a sort of 'escrow system'. The payment from the buyer will be processed online via our system and the money would be on hold until the seller sends the card to the buyer and the buyer gives us the thumbs up that everything is ok.

Is that how you plan to make money? Are there currently any fees to use the site?

At the moment it's free to list your card for sale and also to purchase a card. When we introduce the escrow option we plan to charge a certain percentage for cards that carry higher values. With this service the sellers that are selling expensive cards are more certain to receive their full payment and also the buyer to receive the card that he intended to purchase.

We are are also working to create a system that will automatically check the validity of a gift card based on the serial number. In the future we would also like to allow users that have very little amount left on their gift cards to sell them to Giftah directly for credits they could use to buy other gift cards on the website.

There are plenty of other sites out there that offer a similar service like Plastic Jungle, cardavenue and swapagift.com. How is Giftah different?

These site are based in the US and merely offer to buy the gift cards at a discount directly, not allowing users to independently list them and allowing others to bid on them.

So Giftah is the only online marketplace in Canada of its kind?

So far it sure is.

What is the average discount someone could expect for buying a gift card on your site?

Since we have only been running the system for a few days now I cannot say for certain, but seeing from the current cards that are up for sale, the cards can open up anywhere from 50% below their face value and close to about 15-30% below face value.

For more info on Giftah, check our their FAQs page. Rez also mentioned to me that they're working on a Facebook application that will function with the site and allow users to see all the gift cards their friends have.