Social Gifting App Wrapp Tots Up A Million Gift-Card Redemptions

The social gifting app Wrapp has generated a million gift card redemptions at more than 200 retailers, with nearly half occurring in December alone, the company said.

The social gifting app Wrapp has generated a million gift card redemptions at more than 200 retailers with nearly half occurring in December, the company said.

The Swedish company, whose app goes head-to-head with Facebook Gifts, launched in late 2011. (Facebook acquired Karma, which formed the basis for Gifts, in May 2012.)

Wrapp expanded into the U.S. in May, opening a San Francisco office. The United States is already its largest market, whether measured by users or gift cards given and redeemed.

The service allows users to send a gift card for a particular brand digitally either on Facebook or by text or email. Using the Web or Wrapp’s standalone app, gift recipients can store the balance of their cards on their mobile device. Ninety percent of its transactions occur on mobile phones, the company says.

Wrapp sees itself as different from Facebook Gifts because its focus is on in-store sales rather than e-commerce. Many retailers provide a base amount on a card that one user can give another: The company sees that value as a way for businesses to acquire new customers for less than they can through mobile advertising.

“We believe we offer the most cost effective brand-building service available,” said CEO Hjalmar Winbladh.

Facebook has not disclosed how much business it is doing through Gifts, but it has said the business is relatively small.

Wrapp is hoping to have its app become part of mobile wallet offerings, which would allow users to save their gift card values in the same app with their credit cards, chief operations officer Aaron Forth said.

“Google, PayPal, Isis: All of these guys have the same problem, which is that merchants don’t need another way to get paid; credit cards work pretty well. We see our focus as driving consumers into retailers, [so] we have utility for the folks that are making the wallets; they need that viral component,” Forth said.