Startup Giftly has opted to bypass the retailer on its gift cards by creating location-based virtual gift cards that become activated when the recipient is physically at the retailer the cards are intended for. Once the recipient logs onto the Giftly website and verifies their location, they can have the gift card cash sent to a credit card, debit card, or paypal. For the smart-phone-less recipients (like my mother-in-law) Giftly intends to offer the option of a Visa open-loop gift card.
It’s a neat idea certainly, but one has to wonder if receiving a virtual gift card that can’t actually be spent at the store is as gratifying as actually getting a piece of plastic that can be exchanged for real stuff. It’s possible that a virtual gift card like this cross the line from thoughtful gift card (“Hey, you got me a Target gift card; I love shopping at Target”) to thoughtless gift card (“Wow, I actually have to spend my own money first to be able to buy something with this gift card.”).
Those considerations aside, Giftly offers several benefits over traditional gift cards, especially open-loop ones
- You no longer have to worry about having a few bucks left on your gift card that you can’t spend – it all gets sent to your credit card or PayPal.
- You can stack multiple gifts on the same card, making it much more likely you’ll be able to use them.
- Their gift card never expire (as long as the company is in business presumably).
- Your gift doesn’t have to be restricted to just one business but can include several or can just be used anywhere.
- Once a recipient unlocks the amount by visiting the store, they can spend it anywhere.
- You can make the gift card for ANY store, not just ones that actually have gift cards.
These alone might get me to buy a Giftly card for one of my friends or relatives that really appreciates gift cards instead of a traditional one.
Giftly, while they won’t spill all the beans on their yet to be released Visa gift card feature, claim they want to make it seamless to transfer money on and off those cards as well, which would go a long way to solving the last few bucks problem with open-loop gift cards and something we welcome.
A new service called GiftRocket is creating virtual gift cards that are tied to the recipient being in the vicinity of a specific location (based on a smartphones GPS reading) to redeem them.
GiftRocket, a Y Combinator-backed startup, is launching this week a service that marries the concept of virtual gift cards with location-based services.
Basically, GiftRocket lets you send money to a friend or relative in a snap, but also see to it that the transaction is effectively made only when the recipient ‘checks in’ to a certain location.
Hence, you could use GiftRocket to send $15 to a friend to sway him or her into checking out the breakfast offering at that coffee place you’ve been raving about, or you can gift your mother a $50 bouquet of flowers but only if she visits that new flower shop a couple of blocks away.
In my opinion, it is a toss up whether gift givers will actually want to make their friends or loved ones check in to a specific location to receive a virtual gift card or that recipients will bother. But as one of GiftRockets founders points out:
There aren’t any new hoops to jump through. Just like you’d have to go to a store to spend a gift certificate, we want recipients to go to the business to spend their giftrocket.
And the recipient gets money transferred to their PayPal account, which is considerably easier to spend (and to spend all of it) than most gift card, especially open-loop ones.
Perhaps a service like GiftRocket will be a hit with parents, who can leave a trail of small gifts to get their children to visit all the right places each day or each week … like school, the library, or home. Hmmm.
Electronic only gift cards still pose a higher risk to consumers due to the increased likelihood of losing or forgetting about them, but that doesn’t mean that carrying your gift cards around in an electronic form isn’t a good idea.
When we first reported on gift card apps earlier this year, gift card apps like the one from Wildcard Networks and Tango were interesting but supported few cards. Since then they have continued to add supported cards but still very few compared to what is out there; about 25 for Wildcard and 60 for Tango. Additionally, these apps are iPhone only.
I still think this kind of app holds promise if it ever gets gets widespread enough. One promising sign is similar service called CardMobili that is for loyalty cards, for instance, for airline miles. This service has apps for all major smart phones and supports hundreds of cards. If something like this were available for gift cards, I would say it was a no brainer.
We’ll continue to monitor this space for improvements.
The Tango Card comes with a neat feature that automatically sends you periodic updates on the balance of your cards.