Facebook to Offer Gift Cards
By Heather Kelly, CNN
(CNN) — Facebook is expanding its Gift feature to include plastic gift cards that carry balances for multiple stores and restaurants.
The cards only work at four stores for now: Target, Jamba Juice, Sephora and The Olive Garden. So if you’ve been wondering how to give your little sister a birthday gift that combines fruit smoothies, lip gloss and unlimited breadsticks, this product is for you.
When you buy a card on the social network for a friend, they get a message informing them of the gift right away (great for scrambling at the last minute). The cash amount is loaded on to a plastic card that is delivered in the mail, likely in some sort of paper envelope.
The recipient can then take that physical card into a physical store and buy physical goods. For an Internet company, it’s all delightfully old fashioned.
The cards will be rolling out gradually for Facebook users in the United States.
Facebook is entering a crowded field and offers a couple of features to differentiate itself from other gift cards. The gift giver can choose which of the available stores to give money to — say $5 to cover a drink at Jamba Juice and $20 for home goods at Target. The recipient can monitor the balances on their card from the Facebook app (but they can’t move the money between vendors, no matter how much they would rather have mascara than pasta). Any gift amounts they get in the future are automatically added to the same card.
Facebook launched its Gifts feature in September for physical goods like chocolate, shirts, flowers and wine, as well as virtual items like donations to charity, Uber credit and Netflix subscriptions. It also offered gift cards for specific vendors such as Starbucks and iTunes. This new card is different because it will work at multiple retailers, is refillable and integrates with the Facebook app.
Even though you can see your card’s balance on a smartphone, there aren’t mobile payment options at the moment. Facebook cards aren’t compatible with existing mobile payment technology like NFC, QR codes or barcodes that allow people to pay for goods with their mobile phone. For now the company is sticking with the traditional plastic rectangle and magnetic-strip technology that is most widely accepted across the United States.
The new product falls somewhere between store-specific cards and bank-issued open gift cards that can be used almost anywhere credit cards are accepted.
It also may create some privacy issues. In order to receive the card, the recipient will have to share their mailing address with Facebook, which might make some people uncomfortable.
Gift cards are an easy workaround for people who don’t have enough time or personal knowledge to pick out a specific gift. Like cash, you know it will be useful and there’s no danger of getting people something they will hate. Choosing cards from specific vendors like a favorite coffee spot or clothing store can be slightly more personal than a Visa card to be used anywhere. With this card you can mix and match stores.
Facebook has been experimenting with all kinds of money-making schemes in the past year, like paying to send messages to strangers. Most of the company’s revenue comes from advertising — 84%, according to the latest earnings report — but it also makes some money off games and programs like Facebook Gifts. The social network says it has more than a billion active users, and that’s a largely untapped resource.
A Facebook spokesperson said the company had nothing to share about how it will make money off the Card service. There are no fees for the gift giver or gift receiver, so Facebook is likely earning a percentage from the participating companies.