What Is Stockpile?

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.

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21 Consumer Reviews for Stockpile

Average Consumer Rating: 1.6
Rating Snapshot:
5 star: 2 4 star: 1 3 star: 0 2 star: 2 1 star:  16
Bottom Line: 14% would recommend it to a friend
Showing 1-11 of 21
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  • Am I being scammed

    Initially, they were very responsive. I talked to a real person! Today, money is missing, and their phone has been “experiencing unexpected high call volume,” and they don’t respond to my email messages. I will file an official complaint with the SIPC. This is unacceptable, and someone should know!

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

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  • 7 out 7 people found this review helpful

    Need my money!

    • Lawrenceburg, KY,
    • Feb 15, 2018
    • Verified Reviewer

    Stockpile, send me my money! It shouldn't take this long to send money to a bank account. I don't want to report this company, but I will if the issue isn't resolved soon. I will never invest in this company again. Such a headache.

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

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  • 7 out 7 people found this review helpful

    Stay away from Stockpile!

    Stockpile is a scam. Every time I call I get a "we are experiencing an unusually high volume of calls" message, and then it hangs up. I have emailed multiple times with no response.

    I just signed up, and a day later they have stolen my investments.

    Scam! Stay away from Stockpile! You have been warned. One star was one more star than it deserved.

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

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  • 6 out 6 people found this review helpful

    Not worth the heartache

    Stockpile is the Comcast of investing. They ignore your calls by saying they have unusually high call volume that day...every day. They ignore your emails about where missing money on divide ends or after a stock sale.

    This company clearly is only after your money and not after your return patronage. Use another place to build your wealth because what you build on Stockpile is stolen by Stockpile.

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

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  • 8 out 8 people found this review helpful

    Stockpile and your money

    • Tampa, FL,
    • Feb 8, 2018
    • Verified Reviewer

    While Stockpile appears to be a great idea for the beginning investor, there are some things that you should keep in mind.

    When you transfer your money to Stockpile and buy a stock, the purchase goes on the end of day stock pricing and not the current, so if the stock is $3.75 currently but at the end of day it's $5.00, so you are paying $5.00.

    Another thing to keep in mind is when getting your money back, when you request a transfer from your bank to Stockpile, it will take a day. And if you request money out of Stockpile, you may not see it in your account for two weeks.

    My advice is this, if you are looking into becoming a day trader, don't use Stockpile, use E-Trade, TD Ameritrade, or even Fidelity. Be careful of little brokerage firms like this. They burned me, don't let them burn you.

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

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  • 8 out 8 people found this review helpful
    Updated review

    Update

    • California,
    • Feb 3, 2018
    • Verified Reviewer

    My additional shares did come in, but it took almost a week. I would still recommend a more reputable trading company. If you're investing a very small amount under $100, you can use Stockpile, but you're probably going to get the worst trade price possible.

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

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    • Previous review
    • Jan 30, 2018

    Do not buy from Stockpile!

    Warning: Stockpile is a scam. Do not buy from Stockpile. They steal your money during stock splits and instead of giving you the equivalent shares leave your share size the same and reduce the price.

    Also, they say orders execute by 3:00 pm EST when buying a share. However, if the share price goes up after 3:00 pm they'll hold the order until 4:00 pm so they can reduce the amount of shares you own. If the stock price is going down at 3:00 pm they'll place your order right then so you don't benefit from the additional share size.

    These guys are straight scammers. They should get sued for what they do during splits.

    Pay the extra few bucks and go with a reputable trading company.

    (read moreread less...)

  • 12 out 12 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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    • Feb 21, 2018

      Paul Oswalt

      An update on my issue with Stockpile.com: it's now 44 calendar days since selling my first shares. The last time I was able to see my account balance, that money was still "unavailable" cash. I say the last time because my account is currently locked for the third time now (this time for almost a week).

      I received an email from "Hazel" a week ago that read: "Please provide us with your physical and mailing address as we only have a P.O. Box on record. Our Clearing firm is requiring that we have both on record." After emailing that right back to them, nothing happened until I received another email yesterday from "George" that read thus: "Please provide us with your physical and mailing address as we only have a PO. Box on record. Our Clearing firm is requiring that we have both on record." Nuff said.

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  • 11 out 12 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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  • 4 out 7 people found this review helpful

    Great solution for helping kids learn investing

    • Austin, TX,
    • Jan 25, 2018
    • Verified Reviewer

    My 14-year-old son bought the Groupon offering $20 worth of stock for only $10 in December 2017. It was pretty easy to set up a joint account for us to share. It’s a custodial account. After making his initial purchase, he added an additional hundred dollars from his savings. We haven’t experienced any issues with the service so far. He has fun watching the daily values change, and reviewing the trending over time.

    So far we haven’t tried to sell any of our stock. After reading the reviews, I am feeling nervous that we will have problems when we try to sell. I’m wondering if they simply have more business than they were prepared to handle due to the Groupon?

    For now, I’m going to give them five stars because of the ease-of-use, the ability to set up a custodial account, and no issues with the app. I will update my review when we try to sell something.

    Bottom Line: Yes, I would recommend this to a friend

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  • 12 out 12 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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  • 18 out 18 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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