The Future Of The Present

A series of startups want to reboot selflessness with new ways to give gifts.

The Internet, by and large, is a selfish place. Tech startups are so often driven by the ego—not just the ego of their founders, but the ego of their users. “What can this service do for me?” we tend to ask of the latest technological marvel. “How will it improve my life?”

It’s refreshing, then, to encounter a spate of startups that are looking to reboot selflessness. A series of gift-giving startups want to rethink the gift, by hacking both the gift card and the cumbersome process of group gift-buying.

Tim Bentley first got the idea for Giftly last November. He wanted to buy a gift certificate for his mother at her favorite Vermont restaurant, but when he called them up, they said they weren’t set up for that. Bentley began to wonder why you even needed a merchant’s participation to give a gift to be redeemed at their location. Bentley came to realize that in the era of a smartphone, you could create “a gift card that works absolutely everywhere.”

With Giftly, which officially launched earlier this month, the gift-giver can buy a virtual gift card at any business they want. The giver can even custom-tailor a shopping spree or a night out on the town across several businesses, with different amounts selected for each stop. “The ones we find most creative are when people really make an experience for their friend,” Bentley tells Fast Company.

Say my mother buys me $30 to spend at the United Artists theater in Union Square in New York, plus $70 to spend on dinner at Union Square Café. (Thanks, Mom!) I receive an email telling me about her generosity. Next time I’m out at the theater, I check in with my smartphone. Funds are credited to my credit card on the spot. If I don’t spend the full $30 at the theater, no worries: that extra money isn't wasted; there are no frustrating remainders with a Giftly. (Traditionally, about 20% of gift card value goes unused, says Bentley, a situation he hopes Giftly will rectify.)

Since the funds are credited prior to purchase, doesn’t that enable to recipient to cut and run? I might check in at the restaurant and movie theater and spend my $100 on something else, after all. “We find that for the most part, social pressure alone” leads recipients to use the money as intended, says Bentley, declining to offer exact figures. Giftly also encourages recipients to send a thank-you email upon redeeming a gift.

Giftly charges a small fee on a gift card purchase; $2 on a $21-40 gift card, $4 on $41-80, $5 on $81-120, and 5% of anything over $120. Cards under $20 have no fee. Eventually, if Giftly partners with merchants, those fees might be subsidized. But for the time being, Bentley says he wants to focus on the customer experience—the “double joy,” as he calls it, that befalls both the gift giver and recipient. He has been fending off emails from merchants asking to partner with him for months, he says.

If Treatful, another gift card startup, had existed last November, then perhaps Bentley never would have come up with the idea for Giftly. Treatful aims for the exact use case in which Bentley found himself stymied—buying a gift certificate to a fine restaurant.

Currently, only big restaurant chains have really nailed the gift card experience. But buying a gift card to Chili’s or TGI Friday’s is about as thoughtful as handing someone a wad of twenties and a two-for-one coupon for a Baconator. “It feels more intimate to send a gift certificate to a local restaurant,” Hoon Kim, cofounder of Treatful, says. And while some non-chain restaurants do have gift card options available, it’s often a cumbersome process requiring some combination of a PayPal account, a printed PDF form, and the snail mail address of your gift recipient (which you probably don't even have, these days).

Treatful powers a frictionless gift card experience for local restaurants. They partnered with their first restaurant, San Francisco’s Maverick, in December of last year, and have been adding to the roster ever since. Though most people encounter Treatful through the website of a restaurant they already have in mind, in October Treatful will be making their own website a destination in itself, by curating a set of over 100 restaurants in New York, Chicago, L.A., and San Francisco. Adding a Giftly-like flourish of personalization, Treatful’s gift-givers can in some cases choose a certain dining experience—might we interest you in a 12-course dinner for two with wine pairing at Baumé for $682?—rather than an arbitrary dollar amount.

A third gift-giving startup doesn’t tackle gift cards, but rather the more logistically complicated world of the group gift. Like the recently launched Shareagift, LetsGiftIt is designed for people who want to pool funds into getting one big gift, rather than a number of small ones. Founder Ryan O’Donnell first got the idea for the service last year, when he was pooling money to buy a golf club for a buddy who was turning 30, and wound up getting stiffed out of $50. Couldn’t the Internet make this process, as it has all things, less painful?

O'Donnell first launched LetsGiftIt as a sort of “Kickstarter for gifts,” as he says, back in 2010. All the planning that goes into a group purchase is centralized in one place; “You don’t have to walk around with an envelope,” he explains, “or say, ‘You can PayPal me’”—only to find that your thanks for having volunteered to coordinate something like a pricey golf club purchase is a hole in one of your pockets.

In March of this year, O’Donnell decided to pivot the company, focusing on forming partnerships with businesses rather than trying to lure consumers directly to his website. He signed his first partner, 1800Flowers.com, back in August; a plug-in should be ready on that site by early next year, O’Donnell says.

Just because these new sites are all about what you can do for others, don’t expect them to be playing nice with each other. Cutthroat competition reigns even among the most touchy-feely startups. “It’s an interesting, large market with folks solving a common problem, and there is no clear winner,” says O’Donnell. “We are working every day to be the winner.”

[Homepage Image: Flickr user creative_tools]

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2 Comments

  • ILLEGAL AUTHORIZATION

    I am the owner of a business and was UPSET to see Giftly feature my company as a business.  I have made NO agreement nor have I ever heard of your company offering my services and expecting to get paid.  I can only assume you post every company up with the intention that the customer will never redeem the services.  You are FRAUDULENTLY SCAMMING the public and Liable for your actions.  

  • Nipun Jethi

    A powerful and growing gift-giving phenomena of a truly charitable nature is Redditt Gifts. You guys should check that out: http://redditgifts.com/

    According to their site: To date, 46,689 people in 107 countries have spent $1,458,676 on 41,076 gifts!Disclosure: I am good friends with one of the founders.