Gap, Sephora, H&M Are Giving Away Gift Certificates on Facebook

Mashable

Instead of adding another "happy birthday!" comment to your friends' Facebook walls, a startup called Wrapp wants you to post a free gift certificate for stores such as Gap, Sephora or H&M -- as long as your friend meets the brand's target demographic.

After a successful pilot in Sweden, the startup is launching with 10 brands in the U.S. on Thursday.

Brands offer gift certificates through Wrapp to gain exposure online. They already spend money on special offers and discounts.

By using Wrapp, brands can have their target consumers' Facebook friends distribute offers for free, rather than paying for Facebook ads or online banners. Meanwhile, the coupons encourage recipients to travel to brick-and-mortar stores, where they will almost certainly spend more than their coupon value. Brands only pay Wrapp when a customer redeems a gift certificate.

From a consumer perspective, there are a couple of caveats. The first is that certain free gift certificates are only available for certain friends depending on whether their demographics and location are favorable to the advertiser. The second is that free coupons are usually about the value of a discount. We’re not talking substantial free gifts here; if you want one of those, you’ll have to shell out extra money. Wrapp collects a commission for paid gift certificates.

The redemption process is pretty easy. As soon as a gift certificate hits a Facebook wall, it becomes a group gift to which anybody can add. The recipient can use Wrapp’s Android or iPhone app to show a bar code at the store in order to redeem it. In Sweden, 165,000 people have given Facebook friends 1.4 million gift cards since Wrapp went live in November.

Brands are itching to get onto Facebook walls in a social context. That's what Sponsored Stories are about. But this is a much more natural way for consumers to include them. And it could also be a very profitable one.

Image courtesy of iStockphoto, kutaytanir

This story originally published on Mashable here.

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