Facebook Inc. (NASDAQ:FB) at one point ran a Credits program through its social network, where users could get a physical gift card from a partner retailer. Well, with Facebook launching its new Gifts service – where users can purchase gifts for friends directly through Facebook’s site via partner retailers. To go along with Gifts, Facebook is apparently ready to launch the Facebook Card, which is expected to be a physical gift card that recipients can use at ant partner retailer.
It is reported that Facebook Inc. (NASDAQ:FB) is partnering with Target Corporation (NYSE:TGT), Sephora, Jamba Juice and Olive Garden at the start of this program, with the possibility to adding other partners as this service rolls out over the coming months. This can be noteworthy – while online gift cards have been expanding in recent years, the physical gift-card segment of the market is still worth billions of dollars a year.
While Facebook Inc. (NASDAQ:FB) isn’t saying much about this officially – and since the rollout will be gradual over several weeks, there’s likely no rush – it appears that the mechanism for this Facebook Card is a little uncertain. Many retailers like exclusivity, which is why they offer their own gift cards of various denominations – so the money is given to the retailer directly, and the customer is then “forced” to use the card at the retailer. It seems that the giver can load the card with a certain amount, and that amount may then need to be distributed among the partner retailers, and the recipient must use the money allotted to each retailer – a recipient cannot get a $100 Facebook Card and use it at any of the four retailers at any time. If the $100 is split among each of the four retailers and you don’t shop at Sephora, that $25 remains unused; all because of the exclusivity.
What do you think of this Facebook Card experiment? Is there potential for Facebook Inc. (NASDAQ:FB) to improve its e-commerce approach? Will these retailers find success with this? Let us know your thoughts in the comments section below.
DISCLOSURE: I own no positions in any stock mentioned.
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