What Is Stockpile?

By HighYa Research Team
Published on: Feb 20, 2017

Stockpile is an online stock service that allows average people – kids are encouraged, too – to buy fractions of expensive stocks instead of one full share. The company makes these investments easy through stock gift cards and a user-friendly app.

Stockpile CEO Avi Lele got the idea for the service a few Christmases ago when he tried to give stock to his nieces and nephews. The task was pretty much impossible because single shares of big companies like Amazon and Apple were too expensive.

So, Lele and co-founder Sanj Kulkarni created a stock brokerage (company who sells stocks) where customers could by fractions of stocks. If prices on a single share go up $10 in a year and a Stockpile customer owns 25% of a share, they get 25% of that price increase: $2.50.

“Basically, our mission is to make the stock market easy and affordable and accessible,” Stockpile CCO Dan Schatt told us. “You can’t really do anything with $50 in your wallet at a traditional broker. It would cost you probably a couple of thousand of dollars to get started.”

This new idea was even more novel because Stockpile focused on making stocks accessible to kids, an idea that was still in its infancy when, in 2010, Stockpile started filing paperwork to become a company.

As time went on, kid investors became popular because, as Steve Rosen pointed out in a 2017 Chicago Tribune article, young people who learn about investing tend to do it throughout their life.

We think it’s a great idea to educate your kids about finances and investing, but is Stockpile the right solution for helping them understand the world of stocks?

To get a better sense of the answer to that question, we researched how the company works and what other people are saying about it. What we discovered is split up into three sections in this review:

  • How Stockpile Works
  • Stockpile Fees and Other Considerations
  • How Kids Invest Through Stockpile
  • What Other People are Saying About Stockpile

Once we work through each of these areas, we’ll give you our final thoughts about Stockpile.

A Quick Word About Fractional Stocks

As we mentioned earlier, one of Stockpile’s perks is that you don’t have to buy full shares in a company. Rather, you can buy a portion of stock and earn portions of dividends.

Dan Schatt told us this works via a pretty simple process. Each day, Stockpile customers place orders for stock. At the end of the day, Stockpile gathers up all the orders and then buys stock to cover those orders.

Fractional stocks have been around for a while, Dan said, but it never made much sense for big firms to sell them because they usually dealt with clients who had tons of money to spend on stocks and the fees that firms charge.

Since Stockpile is brining on clients who are giving $25, $50 or $100 gift cards, fractional stocks are necessary.

How Stockpile Works

You have two ways of buying stock through Stockpile: purchasing a gift card for someone or selecting stock yourself.

Stockpile Gift Cards for Someone Else

The process of purchasing a Stockpile gift card for someone else is pretty easy.

Go to their website and click on the “Shop Now” button. A menu drops down and you can choose to buy an e-card or a physical gift card.

Stocks are Divided into Categories

Once you click on the link you want, you’re taken to the Stockpile marketplace. Stocks are divided up into categories like “Kids”, “Trending” and “Fashion”.

When you choose your category, you’re presented with all sorts of familiar brand logos and, underneath, the parent company who owns the brand.

For example, when you click on “Kids”, you get dozens of various brands. One of those brands is Barbie, and underneath the Barbie logo, Stockpile lists the parent company, Mattel.

Pro tip: You can buy ETFs, too, which are collections of different types of investments (currency, commodities, stocks) made into one stock.

It’s Fun to Buy Stock from Companies You Know

We like the way Stockpile organizes their stocks and ETFs because we think it’s a great way for investors young and old to put their money toward companies they like.

“A lot of people gravitate to our brokerage because they can connect with the brands they know and love and understand who the parent companies are,” Dan told us. “Buying what you understand and know is something our customers are excited about.”

Once you find the company you want, you click on it and choose the amount of the stock’s gift card you want to buy.

Gift Cards Can Be Used for Stock or Retail Cards

Dan told us the gift card you choose, even though it’s intended for a particular company’s stock, is basically a cash card you can use on the Stockpile site. That means you can redeem it for the stock on the card, other stock on Stockpile or a retail gift card.

The big advantage here, Dan said, is that you have flexibility. If your kid isn’t interested in buying a quarter-share of Apple stock, they can redeem the card’s amount for a Best Buy gift card.

You can also buy Stockpile gift cards in retail stores around the country. We used the company’s store locator to figure out where we could by some gift cards in Seattle. One hundred different Safeway and Kroger locations sold the cards.

Pro tip: You don’t have to have a brokerage account with Stockpile in order to buy someone a gift card.

Buying Stock for Yourself Through Stockpile

If you aren’t in the giving mood and you want to buy stock for yourself, you have the ability to do that through Stockpile’s website.

You’ll have to open an account with Stockpile – the industry lingo for this is “brokerage account”, which means the account you use to buy stock. Buying actual stock happens two ways:

  • Pick stock, buy it and open an account with a linked bank acct.
  • Open an account, link bank acct. & buy stock

According to Stockpile’s FAQ section, if you place your orders before 3 p.m. EST, you’ll have the stock in your account by the end of the day.

How Kids Invest Through Stockpile

The thought of helping kids invest in the stock of companies they love is a great idea, but how does it work, exactly?

“We actually allow kids to have their own log in, and they can request a trade as long as they have their parent’s permission,” he said. “Kids get to track their stocks and it gives them an opportunity to get their toe in the water at a very low price.”

These accounts are what’s known as custodial accounts – the kids own the stock but the parent opens the account and is responsible for it until the child turns 18.

When the child wants to make a trade either for stock or to exchange their stock gift card for a retail gift card, a notification is sent to the parents, who then decide if they’ll approve or deny the trade.

Stockpile Fees and Other Considerations

Stockpile’s fee structure is pretty simple. They have sets of fees for buying and selling stock.

Fees for Buying a Stockpile Gift Card

When you purchase a gift card, you’re paying all the fees associated with the card so that the recipient doesn’t have to.

Stockpile will charge you $2.99 for the card, as well as a 3% fee of the value of the card. So, if you buy a $50 card for Apple stock, you’ll be charged $2.99 and $1.50 (3% of $50) for a total of $4.49.

Some might argue that paying almost $5 for $50 worth of stock is too much, but we’ll get to that in a minute.

Fees for Making Trades on Stockpile

Any time you buy or sell a stock for yourself on Stockpile, you’ll pay $0.99 per transaction. That fee is really low compared to what you’d pay a big brokerage firm or a financial advisor, and, in that sense, Stockpile is making trading affordable for everyone.

They aren’t the only app/website offering low-fee stock trades, though. Robinhood lets you trade stock for free. However, the site doesn’t allow minors to trade stocks, something that sets Stockpile apart.

Insurance on Your Purchases

All stocks held by Stockpile customers are protected by something called SIPC, which is an acronym that means: Security Investors Protection Corporation.

SIPC-insured stocks mean that, if Stockpile goes under and the company disappears, SIPC will reimburse you up to $500,000 for the stock you owned.

Why will they reimburse you for stock you lost? Because Stockpile is a member of the SIPC. This is an important designation that adds to the company’s credibility.

What Are Other People Saying About Stockpile?

The reviews of Stockpile have been pretty positive and impressive, as heavy-hitting sites praise the company for making the world of investing accessible to people under 18 years old.

A 2015 article from Consumer Reports noted that merging stock and gift cards was a great idea, and that it could have an impact on kids if they actually caught on during the holidays.

“But if the marriage of gift cards and stocks catches on, this could be a novel way for kids to start investing,” reporter Chris Horymski wrote. “It wouldn’t be bad for the online brokerage firm, Stockpile, either, which is behind the stock gift cards. The company could end up with some new, long-term customers.”

On the other hand, Seeking Alpha’s Reuben Gregg Brewer said you should avoid Stockpile's gift cards.. His main criticism is the cost of buying a card for someone. When you’re paying a nearly 10% total fee for a $50 worth of stock, it’s just not worth it, he said.

“That's a huge cost, particularly when some brokers are willing to give away free trades for new business,” Brewer wrote. “True, you might need more than $25 to open an account for Junior and there are likely to be more headaches involved in the process, but I'd be loath to pay what amounts to a trading commission of that scale for anything.”

In our opinion, this criticism is pretty harsh. While brokerage firms may offer free trades in order to get business, the business they want doesn’t include under-18 investors.

They’re looking for established – or at least wealthy – individuals who have thousands to spend on their investments.

Also, as Brewer goes on to point out, a 10% fee is what you can expect when you buy a gift card from a grocery store, so Stockpile’s gift-card fees aren’t unusual.

However, Stockpile’s gift cards can buy stocks that gain value over time. Gift cards for stores lose value over time as the dollar amount on the card stays the same as inflation rises and cost of goods increase.

Our Final Thoughts About Stockpile

Stockpile is an innovative product because it allows parents to teach their kids about investing through hands-on trading.

The stock comes in a form of currency (gift card) that kids understand. Cashing in the card is as simple as typing in a code and setting up an account.

Easy for Kids to Use

The way Stockpile chose to organize their stock by categories is also pretty cool. Kids can literally shop for stock just like they’d shop for something on Target’s website. Identifying brands they like helps them choose what they want to buy.

In our opinion, this methodology is pretty amazing. It seems to be working, too. As we mentioned earlier, 25% of Stockpile’s customers are under 18.

Easy for Adults to Use

Stockpile’s kid-friendly user experience also benefits adults who are new to investing. But it’s not just about making stock choices easy.

The ease with which you can set up a brokerage account and buy stock is a low barrier that most adults can hop over without any problems.

If you’re a more advanced investor, you may not like Stockpile because stock choices are limited. You might want to check out Robinhood, as you’ll have more of a choice of stocks and trades are free.


Read 49 Stockpile Customer Reviews and Complaints

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Average Customer Rating: 2.1
Rating Snapshot:
5 star: 10 4 star: 2 3 star: 2 2 star: 2 1 star:  33
Bottom Line: 22% would recommend it to a friend
Showing 1-11 of 49
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  • 29 out 71 people found this review helpful

    Worst experience

    • California,
    • Aug 16, 2017
    • Verified Reviewer

    About a month ago I accidentally purchased a gift card with Stockpile thinking it was an e-gift purchase through my Verizon. It was for $75, but with the fee, it came up to about $82.00.

    I tried reaching out several times to see if there was a way they could refund the fee. I talked to Micheal after speaking with different reps, who assured me he would be sending me a refund, after I had to pretty much argue and was told I made the mistake and needed to take responsibility for the mistake made. I'm not arguing that. Just the way it came out by him caught me by surprise, being that this is suppose to be a professional business. I work in customer service for Verizon and I would never in a million years make a customer feel that way. Even if it is an error on their end. Everyone makes mistakes. We're human.

    It's now almost a month into this nightmare, and I have not once received any type of follow up, I was able to see that the account is still active, which means nothing has been resolved. I'm at the point where I don't even want the money back but also would never recommend this company to anyone! Customer service is horrible, which is a big part of having a business. If I went to a restaurant and food was horrible but customer service was great, I can overlook that and still come back just because I felt valued. This company is unprofessional, and it's a company that I just don't feel is legit.

    Bottom Line: No, I would not recommend this to a friend

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  • 21 out 28 people found this review helpful

    Poor service

    • Watford City, ND,
    • Dec 18, 2017
    • Verified Reviewer

    Stockpile was unable to activate my account, claiming additional regulatory information was necessary when it had been provided. Customer service did not attempt to rectify the situation in any way, with the exception of essentially throwing the purchased gift cards back at me and suggesting I return them to the gifter or pass them on. As a previous review mentioned, extremely callous and poor behavior for a professional company.

    Bottom Line: No, I would not recommend this to a friend

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  • 20 out 24 people found this review helpful

    Trouble with the account and service

    • Illinois,
    • Jan 6, 2018
    • Verified Reviewer

    I bought a few partial stocks at the end of December 2017. For a while, the app dashboard showed only the initial purchase through Groupon. Nothing else appeared.

    Now, I cannot even log in to my account using the same credentials I used before. The account is shown as blocked without any alerts or explanation.

    I tried calling, but they keep you on hold for hours. Send an email - nothing, not even a standard acknowledgment that they received my email.

    It's starting to look like a ripoff. I am planning to submit consumer complaints first, and then sue the company, if I receive no resolution.

    Bottom Line: No, I would not recommend this to a friend

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  • 14 out 17 people found this review helpful

    Worst customer service feels like a scam!

    I received a Stockpile gift card as a gift and opened an account promptly and used it to buy stock shares. After downloading the app a couple days later, I log in to buy more and see my balance is $0.00. Thinking it could be a glitch in the app, I send an email to customer service asking why my stocks have disappeared and it’s showing a zero balance. Needless to say, two weeks later no response and my login/email associated with the account no longer works. I called customer service and was on hold for almost an hour with no resolve.

    Total RIP-OFF! Scam. As someone who has used other service to buy/trade, this is not normal!

    Bottom Line: No, I would not recommend this to a friend

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  • 30 out 34 people found this review helpful
    Updated review

    Update

    • El Dorado Hills, CA,
    • Jan 12, 2018
    • Verified Reviewer

    Since I received NO help whatsoever and didn't get a refund, I contacted FINRA Whistleblower and put a complaint in. If enough people complain, maybe this business will straighten up.

    Bottom Line: No, I would not recommend this to a friend

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    • Previous review
    • Dec 28, 2017

    Poor service

    I purchased gift cards plus attempted to give them each $50.00 online, which transferred from my credit card account to who knows whose account for my two grandsons so that they could start investing. I tried to open an account for one of them, but kept getting error messages. I tried calling, was on hold for over 20 minutes, then I hung up. I emailed and was told that if I couldn't figure it out to come back to them. I emailed again, and I'm waiting for a response.

    Telephone service is horrible. Online service is just as bad. This is more trouble than it is worth.

    (read moreread less...)

  • 15 out 18 people found this review helpful

    Would not recommend

    • North Carolina,
    • Jan 18, 2018
    • Verified Reviewer

    The following is my conversation with Stockpile starting January 1st.

    ME: January 1st -

    Just redeemed a Groupon gift of twenty dollars . bought Ryanair stock, it is not showing in my portfolio.

    Mike,

    I see your trade and my trade desk will restore your position in the next couple of days. Rest assured the excution price and quantity will all be as of the trade date.

    Sorry for the delay.

    Michael

    ME: January 5th -

    Trade still not there.

    ME: January 9th -

    Trade still not there.

    Hello,

    Thank you for reaching out!

    I do see your trade on my end and my trade desk will restore your position on your Stockpile account in the next couple of days.

    Rest assured the execution price and quantity will be same of the trade date.

    We really apologize for the delay.

    Have a great day and thanks for being a Stockpile customer.

    Warm Regards,

    Stockpile Support

    ME:

    Ok so the trade was 9 days ago. i have reached out twice and got the same stock reply from two people. the couple of days is now going into the 10th day . if you can not resolve the issue refund my money and close this account. this is no way to do business

    ME: January 11th -

    Still nothing?

    Hello?

    ME: January 14th -

    Hello, can anyone there help me with this?

    It has been 2 weeks now.

    ME: January 16th -

    Anyone there?

    22h ago. Not seen yet.

    As of right now, January 17th, I have still not heard from them, so no I would not recommend Stockpile. I am glad I did not link my bank account to the account like they wanted me too.

    Bottom Line: No, I would not recommend this to a friend

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  • 15 out 18 people found this review helpful

    Stay away.

    • North Carolina,
    • Jan 18, 2018
    • Verified Reviewer

    It's a scam. I've tried to transfer my money from Stockpile account to my bank. I initiated a transfer on 1/3/18, and it's 1/17/18 today, and no funds were received. They won't respond to your phone calls. They pretty much stole my money.

    Bottom Line: No, I would not recommend this to a friend

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  • 21 out 24 people found this review helpful

    Stockpile will steal your money, beware!

    I invested money with this company but ran into a serious nightmare when trying to cash out.

    They won't answer their phones, nor respond to emails, and their "live chat" option is fake. I ended up having to use social media, commenting on their Instagram posts, Facebook posts, and Tweeting them, and news outlets.

    I also reported them to the BBB and FTC. They called me, after 11 days of social media usage. They explained openly that they have issues returning the money, and tried blaming it on some regulatory issues.

    I finally got my money 12 days after asking for it, only to also find out the transfer was never initiated in the first place, they have no real intention of ever returning my money, and only did once they realized that I would not be giving up.

    For the final insult, they offered me $5 in credit to buy more stock, as an apology.

    Do NOT use this company; they will rob you!

    Bottom Line: No, I would not recommend this to a friend

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  • 16 out 19 people found this review helpful

    Worst customer service of ANY company

    Like many, I heard about this brokerage through the $20 Groupon offer. Paying $10 for $20 worth of stock seem like a deal.

    NOT.

    The trade never went through. I wrote and received no reply and also tried their chat service. It's bogus - not even live.

    Then after waiting for 2 and 1/2 hours on hold, I spoke with an irritated woman who clearly had fielded complaints all day. She told me she would "escalate my problem." Well, finally a week later my trade showed up in my account.

    Not worth the hassle or your time, and DEFINITELY not worth your money. Stay far away from Stockpile if you want to keep your sanity.

    Bottom Line: No, I would not recommend this to a friend

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  • 14 out 18 people found this review helpful

    Bad customer service

    • San Francisco, CA,
    • Jan 27, 2018
    • Verified Reviewer

    I do not know if I lost all my money, but it is starting to feel like I did. They are having a problem with verifying my bank information, so I called customer service, and they said they needed my debit card so I wouldn't be charged for the bank problem. What? I have yet to get a call back.

    Bottom Line: No, I would not recommend this to a friend

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  • 16 out 19 people found this review helpful

    Still waiting for my money. Ponzi scheme?

    I've had an account with Stockpile.com for just over a year now. I sent money every couple of months from a bank account and purchased 4-5 stocks with it. This month I began selling the first batch of stocks, and the account became unceremoniously locked. After sending them an image of my driver's license, they unlocked the account, but the money from selling the stocks was "unavailable" to me. A few days later, the account was unceremoniously locked again.

    It's been 19 calendar days since my first stock sale, and I'm still waiting for the account to become unlocked. My online inquiries haven't received a response for over a week now.

    Bottom Line: No, I would not recommend this to a friend

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