Starbucks Leads (Quietly) With Virtual Gift Cards
First Data, Qualcomm and Google are hard at work devising a format for a virtual gift card – their answer to the plastic versions that often go completely or partially unredeemed. The theory is that, with virtual gift cards, consumers can send and redeem gifts in small amounts on a more regular basis, via email, mobile phones or social networking sites, according to BusinessWeek.
As it happens Starbucks has been quietly rolling out its own version of this theory, to much success.
In an interview with eMarketer, Ryan Records, director of the Starbucks Card program, describes what has happened with the retailer’s e-gift initiative since it launched on January 26. The company wanted to improve its earlier format, which was to send the gift card through its Facebook app. But it was clumsy, he said – the customer and recipient had to “like” Starbucks, they had to download the app and have registered cards. Only then could the money move back and forth. With the new program, on which it partnered with CashStar, someone can send a recipient a cup of Starbucks coffee, or whatever, as a gift using only an email address or as a gift on their Facebook wall.
It has turned out to be a winner among people seeking a last-minute gift, such as on Valentine’s Day, he told eMarketer. Starbucks isn’t advertising it. Rather it is informing its Facebook fans and registered cardholders they have the ability to send e-gifts.
The Google, First Data, Qualcomm virtual gift card initiative will be part of Google’s mobile wallet service it is rolling out this summer, sources told BusinessWeek. The numbers are large enough to attract Google – within a year the mobile gift card market could reach $1 billion in the US, in terms of face value, according to Brian Riley, research director at financial industry consultant TowerGroup. That is from a starting point of close to zero. Their development could also spur gift-card use in traditional retail stores, he told BusinessWeek, doubling or tripling in use.