Gifting Starbucks coffee, lipstick or a free week of online access to The Wall Street Journal could become the new currency for Facebook Fans.
The Sweden start-up Wrapp has brought social gifting to the United States, along with specials from Gap, H&M, Sephora, Björn Borg, Gant, and SpaFinder Wellness, among others.
Consumers can initiate the free card with a minimal balance through an app. Other friends add money to the gift. In the first month, 1.4 million gift cards were sent by about 165,000 people in a country with 4.8 million Facebook users, according to Wrapp's CEO Hjalmar Winbladh. "The average age -- between 25 and 35 -- of Wrapp users correlates well with the retailer's target audience," he said.
Wrapp supports about 40 active retailers in Sweden, the United Kingdom and the United States. The free portion of gift cards to consumers range between $5 and $80, depending on the company's targeting strategy. Winbladh said some brands offered Facebook Fans in Sweden holiday gift cards. He expects more companies to join the service by November, where minimums will start at about $1 or $2 -- which makes sense for coffee shops, such as Starbucks.
The performance-based marketing app can also drive sales from the Web into physical stores without discounts. Caribbean cruise line, for example, might offer $80 gift cards to Facebook Fans to use on vacations.
Aside from agreeing to cover the initial dollar amount -- such as $5 -- to initiate the gift card, merchants also pay a "small transaction fee" when consumers redeem gift cards.
Some retailers also tie gifting to search engine marketing campaigns by providing free cards to Facebook Fans. Winbladh said it pushes consumers to share the gift with others. Typically, those friends will search on engines for more information about the company before passing the gift on.
Wrapp received funding in January from Greylock Partners, and Atomico, an international venture capital firm formed by Niklas Zennström, Skype co-founder.