Givt, a new gift card app for the iPhone says it offers merchants a solution for getting more consumers through the door and one that doesn’t involve the high risks of running a promotion with deal sites like Groupon.
The new app offers free gift cards that users can give to their Facebook friends. When the recipient of the gift card cashes it in, the merchant only pays a small fee to Givt.
“The key is that they only pay (Givt) for actual customers. If somebody gives a card to their friend and they never use it, it never costs the business owner anything,” said Josh Cooper chief operating officer of Givt Inc. “Rather than clicks, the merchant gets actual people buying things. So the total cost to the merchant is the value of the gift card they gave to the consumer plus our small fee.”
According to Cooper Givt can be a good option for small businesses that might not have the budget for more costly forms of advertising and merchants have better control over their offers, unlike deal promotions where they may have to pay as much as 50% of the income from any deals sold.
“Many businesses already give away free gift cards, but they have to pay for design, printing, and postage, and then hope they target the right groups when they mail out,” added Cooper. “We make all of that free and let consumers pick who to give the cards to. The best advocates for merchants are usually the customers who already love their business, so we make it easy for these customers to share their favorite businesses with friends.”
According to a recent survey by the National Retail Association, six in ten people, or 59.8% of 9383 of those polled said they’d like to receive gift cards this year. That’s up from last year’s 57.7 percent. While free gift cards can’t compare with the more expensive purchased cards (Hey, it’s the thought that counts!), it shows that merchants are in tune popular consumer trends.
Givt is currently only available in the company’s Toledo, Ohio home town, but plans to begin a national expansion within the next couple of months.