By Sarah Kessler 2011-09-29 18:17:26 UTC
The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark. If you would like to have your startup considered for inclusion, please see the details here .
Quick Pitch: Giftly lets users create custom gift cards for any store.
Genius Idea: Bypassing the merchant in the gift card process by using a mobile checkin for redemption.
In theory, gift cards are a great way to cut down the number of wrongly-sized sweaters, useless knickknacks and uninspired coffee table books you receive. But the fact is these cards — the virtual version alone consulting firm Aite Group predicts will grow into a $10 billion industry by 2015 — often go unused. The average American family has about $300 worth of them collecting dust at home.
Startups like Plastic Jungle and Cardpool have responded to this inefficiency by creating resale markets for gift cards. Giftly, which launched in May, wants to fix the problem at its source — by creating the "cooler, more sophisticated, and smarter cousin to the gift card."
Here's how it works: The gift giver goes to Giftly's website and designs a gift certificate. You can decorate it with a picture, write a message and choose up to three stores where it can be used. Any location on Yelp can be listed on a Giftly certificate.
Giftly is free to use for gifts less than $20. For more expensive gifts, the startup charges a fee. A $30 certificate, for instance, costs $2. After purchasing the gift, the buyer can print it, email it or post it on the recipient's Facebook profile.
When recipients want to redeem the gift certificate, they must sign up for a Giftly account and provide their credit card information. When they use their mobile phone to check in at the merchant location on BeGiftly.com, the full amount of the gift — regardless of what was purchased — is credited directly to their credit card accounts.
The buyer doesn't need to visit a physical location to purchase a gift card that works there, and gift cards can
be used at locations that don't necessarily issue them. Plus, the recipient doesn't have to deal with a leftover balance on a card.
The process is a lot like handing someone cash, but requiring them to be in a certain location before they can use it.
"There's a level of personalization where you can think about, 'What does this person like?' And you can reflect that in the gift really easily," Giftly founder and CEO Tim Bentley. "I know where a friend lives and can give him a gift that works at places near him. Or, if I learn that you really like mojitos, I can give you a gift that will work at places where they have great mojitos in New York."
That's a fair point. But how do I explain to my less than tech-savvy grandmother how to access the New York mojito adventure I've gifted her through her mobile phone?
Bentley concedes that this might be an issue. But a Giftly partnership with Visa should soon help with sending a physical gift card. This re-introduces the leftover balance problem, but it also allows me to give a more personalized version of a Visa gift card.
Bentley doesn't see the physical gift card as the future of his business, however. He says he hopes the purely virtual concept will continue to grow more relevant along with the rise in smartphones, the mobile wallet and increased sharing on social networks like Facebook.
"We're seeing a ton of distance gifting, remote gifting,'" Bentley says. "Rather than just writing a wall post, we're seeing people send a Giftly. It's a way to actually send them an experience in the real world."
Series Supported by Microsoft BizSpark
The Spark of Genius Series highlights a unique feature of startups and is made possible by Microsoft BizSpark. a startup program that gives you three-year access to the latest Microsoft development tools, as well as connecting you to a nationwide network of investors and incubators. There are no upfront costs, so if your business is privately owned, less than three years old, and generates less than U.S.$1 million in annual revenue, you can sign up today .