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The executive who oversaw the transformation of a former fuel-transaction processing company to a full-service prepaid processor has been tapped to lead the e-commerce gift card company GiftCertificates.com.
On Aug. 20, GiftCertificates.com named Gary Krow, 53, as its CEO. The company is an e-commerce provider of gift products for both the consumer and corporate markets.
Krow, who has 25 years of experience in the information services and the petroleum industries, comes to his post from his former role as "CEO in residence" at Lightyear Capital LLC, a New York-based private equity investment firm.
His goal is to grow GiftCertifcates.com's share of the corporate rewards and incentives market. The Omaha-based e-commerce company has 75 full-time employees and lists several Fortune 50 companies on its client list, Krow says.
"We're going to start going wider and deeper in the business-to-business client base," Krow says. "The value proposition is too strong for it not to be successful."
Krow's successful–if somewhat controversial–eight-year tenure at Comdata Corp., an electronic payment-processing and program-management company, convinced GiftCertificates.com board members that Krow possesses the experience and skills to lead the e-commerce business, according to Harvey Klein, board chairman and representative of the company's largest shareholder, New York-based Gotham Partners LP.
Krow served as president of Comdata from 1999 through 2007 and led various divisions in the company before his appointment to GiftCertificates.com. Comdata is based in Brentwood, Tenn.
His exit from Comdata in 2007 was marred by controversy, however, when the board of Comdata's parent, Minneapolis-based Ceridian Corp., accused Krow of leaking confidential information to New York-based Pershing Square Capital Management LP, a hedge fund locked in a proxy battle with Ceridian.
Both Krow and Pershing Square denied the leak took place; representatives from Ceridian did not return calls seeking comment.
"My issues with Ceridian are settled, and I look forward to the opportunities ahead as CEO of GiftCertificates.com," Krow says, declining further comment.
As president of Comdata, Krow oversaw the evolution of Comdata to a full-service electronic payment-processing company from its roots as a diesel fuel transaction-processing company. Under his watch, Comdata accelerated its growth rate, increased revenues and boosted operating margins.
"Gary's leadership and vision, combined with nearly two decades of experience in corporate payment solutions, stored value solutions and the payment processing space, are what made him the ideal candidate to lead GiftCertificates.com," Klein says in a statement.
Despite his forced departure, Krow says his experience in transforming Comdata's electronic-processing business opened his eyes to the potential money-making opportunities in dealing with stored value.
"That's where I really fell in love with prepaid industry," he says. "We became world leaders in prepaid stored value gift cards, and I wasn't surprised at all. The value proposition is so strong I knew it couldn't fail."
Indeed, an August 2007 study by Incentive Marketing Inc., which is based in Naperville, Ill., found the market for incentive travel and merchandise in 2006 was $46.1 billion. Gift cards are an option Incentive Marketing included as part of its study of incentive merchandise.
And Krow expects that market share to grow. "We're going to grow with this industry," Krow says. "It's not that expensive for a company, and they get loyalty [and] enhanced employee satisfaction. It's amazing how much mileage they can get out of simply rewarding employees with gift cards."
And gift cards are popular with employees, too, according to Red Gillen, senior analyst at Boston-based Celent LLC, a financial institution consulting company.
"It's kind of like guilt-free money, and people like that," Gillen says. "If they're rewarded with cash, they may feel obligated to save it, but when its cash on a card, they think, 'I've got to spend it.'"
GiftCertificates.com, founded in 1997, also can grow as an administrator of e-commerce rewards, Krow says.
"We're going to be incentive-program mangers for our customers," Krow says. "We're going to provide the turnkey solution, so that all they have to do is hand them out. We want to help them completely run this program in a cost-effective manner, regardless of how big or how small."
