Facebook sells Facebook-branded gift cards

January 31, 2013 04:12 PM

Facebook Inc. today announced that it is adding Facebook-branded physical gift cards to the products that shoppers can buy their friends via its Gifts shopping service. The gift cards, which are reusable, can be used both online and offline at retailers Target Corp. and Sephora USA Inc., as well as beverage chain Jamba Juice and Italian restaurant chain Olive Garden. Target is No. 23 in the Internet Retailer Top 500 Guide and Sephora is No. 136.

Facebook notes a user’s friends’ birthdays, anniversaries and other notable personal dates in the top-right corner of its home page. When a consumer clicks to write a note to his friend, the social network features a link that says “Give him a gift.” Clicking on that link takes him to Facebook’s Gifts page. Consumers also see that link when they view the pages of their friends who are having a birthday.

Consumers can select to buy a friend a Facebook-branded gift in Gifts and pay with a credit card. Once the shopper buys the card, his friend is alerted and the card is sent to her address. The giver can choose to put value for more than one retailer on the card, such as $50 for Target and $10 for Sephora. The recipient cannot use funds dedicated for one business at another. Cardholders can see their card balances by clicking on the Facebook Gift Card tab on Facebook.

The Facebook gift card launch is one way Facebook is aiming to expand the use of Gifts. To date, Gifts has not generated large returns for the social network, and Facebook is still trying to figure out how to leverage it, David Ebersman, Facebook chief financial officer, said yesterday in a conference call with analysts.

“The focus for right now is trying to figure out what the right product is,” he said. “We think Gifts, if done well, can be a very natural and positive part of the Facebook experience. “

Gifts is just one example of Facebook putting more focus on retail over the past year. The social network last year hired eBay Inc. executive Nicolas Franchet to head up its e-commerceglobal vertical marketing team and launched Collections, which offers a new way for retailers to present their products to Facebook users.

Many retailers are embracing Facebook and other social media channels as a marketing channel that, among other things, can drive traffic to their sites. That’s why the Social Media 300, a comprehensive analysis of e-retailers’ social commerce strategies, based its rankings of retailers’ social skills on the percentage of web site traffic that merchants receive from social networks. For many in the guide, social networks are providing a large chunk of their sites' traffic. For instance, the guide's top 50 sites in terms of referral traffic from Facebook derive an average of 9.3% of their overall site traffic from the social network.




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