Facebook dives into the restaurant gift card game

Even if only a tiny fraction of the 1.06 billion people who go on Facebook each month purchase gift cards for their friends, the new Facebook Card will still create a huge burst of revenue for the site’s retailer and restaurant partners. Which is exactly what Olive Garden and Jamba Juice, two of the four companies already on board with Facebook Card, are hoping takes place.

Facebook Card, which made its public debut on Jan. 31, is billed as “a new type of gift card.” We don’t know about that, but the Facebook approach does encourage impulse gifting as no card-buying method has done before.

Here’s how it works, according to a release Facebook posted on its blog.

Facebook bills its new Facebook Card as “a new type of gift card.”

“First, select a gift for your friend from the Gift Cards & Digital category.

“Next, choose a value and complete your purchase. Your friend will be notified instantly about your gift, and will receive a Facebook Card in the mail a few days later. As soon as it arrives, your friend can use the card at the retailer you've chosen for the amount you’ve gifted.”

Which is to say, instead of getting multiple cards, each dedicated to a specific restaurant or store, the recipient receives a single card usable at one or more restaurants or retail outlets.

Unlike most other gift cards, the physical Facebook Card is reusable. The idea is that instead of one-and-done gifting, the card accommodates repeat gifting. It’s billed as a convenience to both the gifter and giftee.

“After you've received a card,” the company tells recipients, “the next time you get a Facebook Card gift, it will instantly be added to your existing card. Your card can hold multiple gift balances, and each balance is dedicated to the retailer associated with the gift. For example, you might have gift balances of $100 at Sephora, $75 at Target, $50 at Olive Garden, and $8.25 at Jamba Juice.”

Card recipients can keep track of their balances by accessing their Facebook account from their smartphone or computer. And Facebook says it will send real-time notifications to cardholders whenever the balance on their card changes. Balances are discrete; a customer who’s a little short on the bill at Olive Garden couldn’t tap into his or her Target balance to make up the shortfall.

Facebook said it plans to gradually expand its gift card service in the U.S. during the coming months. It’s going to need plenty more retail and restaurant partners as it does. Restaurants that would like to participate would want to contact Facebook right away to learn what’s involved in becoming part of the Facebook Card system. Given the massive size of Facebook’s user base, this could be a huge opportunity if the company can leverage its social media expertise into this type of e-commerce.