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Does Social Gifting Make Business Sense?

Does Social Gifting Make Business Sense?

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Facebook acquired social gifting startup Karma to expand their own digital gift giving platform, but does social gifting make sense for your business?


What’s offered is more than an unlimited digital gift card kiosk. Gift options include a wide variety of items from Uber rides, magazine subscriptions, to peanut butter of the month memberships, and of course your typical GAP retail gift card. Most gift platforms even offer charitable choices, an option for the recipient to change the item received, or even select their own gift from a customized list.

Many mobile startups are trying to make gift giving “on-the-go” a thing or at least a beautiful designed experience. See Sincerely, the newly launched Yiftee, Gyft (which doubles as a mobile gift card wallet for yourself), DropGifts, and $10+ million dollar venture backed startup Wrapp as a few examples. Even Amazon Gifting believes that being able to easily select friends from facebook is the only verified friends list that matters. Lets exam why.

The truth is that social gifting is highly measurable. If you give a friend a free month of Wall Street Journal, $5 to Office Depot, or $10 to through Wrapp on their birthday, the acquisition cost to add your friend as a customer is fixed and known. From one verified individual to another verified social identity, it gets personal down to the marketing demographic bucket you and your recipient fall in.

From a retailer perspective it’s measurable from the cost of the gift offer, price spent on the gift, total amount purchased at redemption, what gift platform the recipient came from, and the conversion rate of gift cards. As a new medium, to move the needle generating new customers through social gifting versus heavily discounted Groupon offers, you’ll need to list your merchandise on many platforms.

Not a retailer? Gifts to clients may still make sense for your service business. Startup Wantful offers personalization options for maintaining thoughtful relationships through their iPad app and through corporate gift management for clients, company holiday gifts, employee incentives, and even suggested conference speakers. Personalization options may be priceless to the giver, but nothing standout in mobile startup gifting choices puts your brands or business as an uniquely integrated part of the gift experience.


At the time of publishing, we were unable to find any verified statistics on unclaimed digital gifts compared to unused physical gift cards, one of the most profitable aspects of all gift card programs.