The Social Gift-Giving Wars — Which One Looked Best For The Holiday Season?

With the holiday season upon us, let’s take a look at some of the gift-giving services and how well they work, writes contributor Natasha Starkell.

Facebook’s acquisition of Karma earlier this year must have caused quite a few sighs and fading hopes of the gift-giving websites, and Giftiki was even acquired by LaunchRock a couple of months ago. Yet Facebook Gifts differs from other gift services in how much freedom both the giver and recipient of the present have to select the from the gift options.

Karma, now known as Facebook Gifts, allows Facebook users (by now nearly everyone) to do more than just write “happy birthday” on the friend’s timeline; now users are notified when the their friend has a birthday coming up, they can click on the gift badge, choose a gift from the list provided, and notify the friend via the Timeline or in a private message. Facebook Gifts can be paid once the person accepts the gift, which saves times on post-Christmas returns, exchanges and eBay trading of unwanted gifts. The only thing really lacking is a group-gifting option.

Unlike Facebook Gifts, which offers just one gift option to the recipient, Wantful offers a stylish solution which provides both the gift giver an opportunity to be creative in coming up with the options, and the recipient a selection to choose from. It delivers a beautifully crafted catalog of 12 possible gifts for the recipient. The startup takes pre-Christmas orders, but beware: you have to come up with 12 options for each person you plan to send a gift to, although Wantful does offer an extensive selection of products to choose from.

Swedish Wrapp and its Rocket Internet competitor DropGifts give more power to the recipients to decide what the gift will be. They offer gift cards from participating retailers that users can send their friends via a mobile app. The gift cards, which account for a $100 billion market in the US alone, are paid by the retailers themselves, and the friends can add to the total amount alone, or in groups.

I caught up with Wrapp CEO Hjalmar Winbladh who told me that the retailers promote Wrapp to their customers registered on their email lists and social media fan pages. What’s important for the retailers is that a friend who selects the gift card, endorses that retailer’s brand, so that the friend is more likely to go shopping to that retailer. Wrapp gets paid once the gift card is redeemed in the store. The startup is currently working with a number of retailers on Christmas gifts. Using Wrapp for Christmas looks good for two reasons: first – it is free (or at least subsidized by the retailer), second – one can redeem it just when Christmas sales start and buy more with less. The only limitation is that the receiving party must have a smart phone.

If one prefers the freedom to choose a gift card from any retailer, one can turn to Gyft, which allows buying a gift card from a broad range of retailers through a mobile app. If the recipient of the gift card has an iPhone, the notification will come to its Passbook. The app’s push notifications will remind the recipient to redeem the card, and a mobile phone, unlike paper gift cards, is more likely to be present at the point of sale. An option of uploading and storing the existing gift cards deserves a special mention; although the retailers would rather you keep it pinned to the fridge for eternity.

Germany-based BonaYou offers an ultimate freedom to the recipient to decide what the gift may be by allowing give and receive cash in a form of disposable credit card. BonaYou works well when a family or a group of friends wall to pull resources together for a group gift. Practical and quite popular in Germany, gift cards or cash are most likely presents, according to the recent study by Ernst & Young. BonaYou credit card comes in a little box that can contain optional personalized extras. The service is free, and the startup picks up the crumbs left on the credit card after the purchase. As a Christmas present BonaYou can work well on an individual basis, but if the whole family embraces the idea, it may end with a handful of BonaYou boxes under a Christmas tree. The startup won an award for the best global prepaid gift program recently and sold 200,000 Euro worth of gift cards since March 2012.

After the Christmas season, if you were not so lucky to get cash as a present, remember Cardpool or PlasticJungle which will pay cash in exchange for your gift card and charge you a commission on the sale. Ebay will have to do for any other unwanted gifts.

Natasha Starkell is the CEO of GoalEurope, the outsourcing advisory firm and a publication about outsourcing and innovation in Central and Eastern Europe. For seven years she worked at Unisys in the areas of corporate strategy and M&A, corporate finance and outsourcing. In 2003 she obtained her executive MBA at London Business School and founded GoalEurope. She comes from Novosibirsk, Russia and lived in Switzerland and United Kingdom. She speaks Russian, English and German. She currently resides in Northern Germany where she blogs relentlessly about new technologies from CEE and CIS countries collectively tagged as Eastern Europe.