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The Privacy Triple Play: Digital Giftcards Using Facebook Data And Geolocation

May 2nd, 2012

The gift-giver can then choose to sweeten the amount of the giftcard with a payment card. That card can be posted for all to see, and anyone can add more money to the card. All of that information is saved and can be shared with partners.

Here’s a nice touch: The free giftcard expires within 30 days, but if anyone adds anything at all to the card, it can legally no longer expire. A reminder will also be issued for the free cards when the expiration is imminent.

The retail partners “don’t pay us a penny until an actual gift has been redeemed,” said Greg Spector, Wrapp’s head of communications. Once redeemed, retailers pay “a small transaction fee” plus “a percent of the value of the additions to the card,” Spector said.

The company is still figuring out exactly how it wants to deploy the geolocation reminders, Ehn said, adding that Wrapp is exploring a variety of GPS, cell tower and Wi-Fi access point combinations. As a practical matter, he said, mall options would likely do little more than flag that the store exists somewhere in the mall the customer has just entered, as opposed to directing the customer to the store using Wi-Fi and a mall map.

The privacy issues are real, though. Consumers may not realize—and some may not have intended to consent to—Facebook is giving away private information directly tied to their names. But a vague $25 giftcard—given by a Facebook friend—may not, on its own, set off any privacy alarms. The consumer would likely have no way of knowing that the amount was triggered by their age, gender or location.

Gender is probably the least privacy problematic, because it’s often obvious by either a first name or a Facebook photo. Location is one level up—privacy-invasion-wise—although that, too, is often (but not always) indicated on a public Facebook page. Age, though, is definitely a potential landmine.

This might also lend itself to lots of gifts to friends who would otherwise never receive them. For example, someone with a very large number of “Facebook friends” (many of whom they hardly know) might opt to send the free version of the giftcards to everyone on their list. (Why not, as long as others are paying for it.)

That could make the benefit cited by some—Karl-Johan Persson, CEO of the 2,500-store H&M apparel chain, for example, issued a statement that quoted him saying, “One of the things we like best is that with Wrapp, H&M is being recommended to you by your friends.”—much less meaningful.

Still, this combo of mobile-housed digital giftcards, geolocation and Facebook data is certainly giving the giftcard its best chance for 2012 relevance.


One Comment | Read The Privacy Triple Play: Digital Giftcards Using Facebook Data And Geolocation

  1. Thad Peterson Says:

    This is a really interesting idea that portends a really powerful trend toward linking publicly available personal information with transaction data to deliver perfectly relevant offers in the right place at the right time.

    Privacy will be an issue forever but my guess is that the power of relevance will overwhelm consumer concerns about privacy. After all, that’s what Facebook is all about.


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