Facebook introduces universal gift card that friends can reload for different retailers

featured imageFacebook today announced the Facebook Card, a resusable gift card that can be loaded with balances for different retailers when a user’s friends buy them gifts through Facebook.

The social network has added a number of new partners to its Gifts platform, including Target, Jamba Juice, Olive Garden and Sephora, who will offer gift cards to be purchased on Facebook. But instead of sending individual gift cards for each restaurant or retailer, or sending multiple gift cards for the same business, Facebook will send users one card that can maintain balances for several outlets.

For example, someone might receive a $50 gift card to Target. They’ll receive a Facebook Card in the mail. When another friend gifts them $10 to Jamba Juice, that amount will be automatically added to the same Facebook Card. Users will be able to view their different balances on Facebook.com and within the mobile app. Facebook says this option will roll out to U.S. users beginning today. Because Gifts are not available internationally, Facebook Card is also limited to the U.S. for now.

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This seems to be a way for Facebook to bring in new options for its Gifts product without having to mail users a number of gift cards. However, this might not be intuitive for people who are used to throwing out gift cards once they’ve been used. It may also be confusing for people to understand that they have separate balances for each business, and that the Facebook Card does not offer a total balance that can be spent anywhere.

If Facebook Card does catch on among users, it gives Facebook new information about spending habits, though gift card spending might not be representative of users’ typical purchases. Still, being able to direct ads to users who have spent money — even if it was a gift — is valuable. Facebook did not share any details about its arrangement with Facebook Card partners, but the idea of using this information for ad targeting one day could have been a draw. Facebook could also expand the capability beyond gift redemption and allow the Facebook Card to be used more like a universal wallet, becoming much more of a competitor in the payments space. Interestingly, Facebook decided to begin with a physical card rather than mobile payments, which are a growing area but still require a smartphone and can be complicated for users.

Discover is the payment processing vendor for Facebook Card. For Target the card seems to only apply to in-store purchases, not online. Sephora does allow online purchases with the card. Starbucks, which sells digital gift cards through Facebook Gifts, is not a partner for the Facebook Card.

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In 2010, Facebook got into the gift card business selling its own virtual currency Credits via gift cards at Target, Best Buy and other stores. Credits could be used toward virtual goods in games and other in-app purchases. Last year Facebook decided to phase out Credits in favor of a user’s local currency — dollars, pounds or yen, for example. This gives developers more flexibility and cleared the way for new products like Gifts, user promoted posts and paid messages, which can be bought with actual currency rather than the more complicated Credits system. Facebook continues to sell gift cards for games on its site, both in-stores and as a digital gift in its Gifts platform.

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One Response to “Facebook introduces universal gift card that friends can reload for different retailers”

  1. Getting Social This Week… | bornsocial.co.uk says:

    [...] are always testing, playing and tweaking things, and the latest news is that they have released a Facebook Gift Card to continue their drive into “f-commerce” and push their Gifts functionalities. On top of [...]

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