With New Gifts Launch, Facebook Wants You to Put it on “The Card”
Despite the myriad companies pushing into the virtual gift-card space, it’ll be a long time before physical gift cards go away (if ever). It’s a multibillion-dollar business.
Facebook knows this. And that’s why the company launched the Facebook Card on Thursday morning, a real-world, physical gift card able to be preloaded with credit for multiple stores. Think of it as an uber-card, which can manage balances across the partner companies (only four at launch — Target, Sephora, the Olive Garden and Jamba Juice). You can send the cards to your friends via Facebook’s Gifts product, and the balances are available online for users to keep track of.
It’s a curious move for a few reasons. For one, remember Credits? Those also came in the form of physical, real-world cards available directly through retailers on their shelves. Alas, Facebook gave its Credits program the ax last year, claiming problems with friction in payments on the gaming side.
I can’t help but wonder, though, if the existence of Credits had something to do with how Facebook is partnering with retailers to use the new Facebook Cards. The way Cards works, you see, is that you have to maintain your separate balances at each retailer inside your overall Card account. So if you go online and open up your Facebook Card account, you’ll find a detailed list of, say, 20 bucks in your Target account, and another $35 for some breadsticks over at the Olive Garden. (Those breadsticks are addictive. Be careful.)
But here’s the thing: Wouldn’t it have been easier to use one single, unified currency to keep track of all the Facebook Card money you have across the disparate retail accounts? So, rather than have to split that cash between Target, Jamba Juice and the like, I’ve got one repository for everything? Credits probably would have worked pretty well there.
My best guess: Facebook got pushback on this from the retailers, who would rather have you locked in to their specific, store-related “currency” than be able to spend it across a great many. That’s the whole point of retailers offering gift cards — they want your money to go to them alone. Also, I imagine there’s some sort of infrastructural problem in setting all of this up; perhaps federal or state taxes on different types of virtual currencies changing hands with Credits that I’m just not aware of.
Facebook, of course, had “nothing to share” on the matter. (But thanks anyway, Alex!)
Something else that’s interesting to mull: What with the rise of the smartphone these days, many retailers are building in-house apps for folks to keep track of their gift card purchases and balances directly from the phone. Starbucks is a perfect example of this. The advantage of that model, again, is that these retailers can lock customers into using their cash on a specific store. In other words, Starbucks knows you’ll spend your money at Starbucks when you load money onto your Starbucks account.
That’s not as much of a sure thing when folks are loading cash onto a Facebook Card. People have options, and can, for example, split the $50 they would have gifted to a friend across Sephora and Target accounts on the Facebook card, rather than just giving their friend a $50 Target card outright. Follow me?
I imagine Facebook’s argument to retailers would be increased distribution potential, and perhaps a lower cut of the profits with partners. Again, sadly, Facebook had nothing to share on the details of the deal.
One last thing: Apple’s Passbook. Right now, there’s no integration with Facebook’s Card and iOS’s Passbook. And I imagine that sort of relationship would be complicated (if you’ll pardon that awful, overused pun). For anyone partnered with Facebook in the Card program, Facebook Card integration on Passbook would essentially negate the need for other partners to either build apps or integrate with Passbook themselves.
Plus, I haven’t had a lot of time to think about this, but perhaps there’s some complications in dealing with Apple on this sort of thing, as well.
Again! Nothing to share from Facebook on any sort of Passbook integration. (Come on, y’all! Sharing is caring.)
Expect the Cards initiative to roll out over the next few days to U.S. users.