Facebook made a major new business play on Thursday, launching a service in the U.S. where users can buy each other physical “Gifts.”
The move effectively creates a Facebook online store and puts the world’s largest social network squarely into the e-commerce market led by the likes of Amazon and eBay.
The new “Gifts” feature, which is rolling out in stages for U.S. Facebook users, shows up as a tiny pink gift-wrapped box icon at the top of a Friends’ timeline where a user could ordinarily post a message (located to the right of the “Post” and “Photo” icons).
Facebook will also be promoting the feature through the Friend birthday reminders that appear in the right-hand column of a user’s News Feed. If a birthday reminder pops up, a user will be able to click on the Gift icon and order a physical item for their Friend directly from the reminder.
Here’s what the icon looks like, as seen in this screenshot of a Facebook video introducing the new feature:
“There are hundreds of gifts with more added every day: cupcakes from Magnolia Bakery, a stuffed animal from Gund, or a digital gift card from Starbucks,” Facebook wrote in its press release regarding the feature.
Specifically, Facebook has partnered with over 100 merchants from around the country to allow them to sell their goods on the new service, All Things D reported.
Facebook is also opening Gifts up to other merchants and inviting them to join the service, but says its “under no obligation to engage or otherwise contact” aspiring participating businesses.
Users pay for gifts directly through Facebook by filling out a digital form, while the recipient is responsible for supplying their shipping address (Facebook alerts the recipient of the gift order then asks them to enter their shipping address. It also allows the recipient to exchange the gift for an item of the same value or change the color, size or flavor. If the recipient doesn’t respond within 2 weeks of the order being placed, its automatically canceled and the money refunded.)
Facebook Gifts accepts “any Visa, Mastercard, American Express or Discover branded credit or debit card,” and then sends the buyer a virtual receipt within 24 hours.
However, importantly, Facebook Gifts doesn’t work with the companies own online payments system, Facebook Credits, as Facebook explains: “It’s not possible to use an existing Facebook Credits balance to pay for a Facebook Gift purchase. When sending a gift, you’ll be required to complete payment using a credit or debit card.”
Buyers can also cancel an order prior to shipping by going to their “Account Settings” page and clicking on “Gifts,” while recipients can exchange gifts after they’ve shipped “within 30 days of receiving an item only if it arrives damaged or doesn’t fit correctly (ex: clothing).” But “Facebook does not currently accept returns.”
As for if the recipient doesn’t like the gift, Facebook says it will do its “best to resolve the issue,” but isn’t making any promises, writing:
We work closely with our vendors to make sure that the items we offer are high quality. If you feel that the item you received is of low quality or isn’t what you expected, please provide feedback so that we can improve your experience.
But most importantly for Facebook’s business and stock market performance prospects going forward, the Gifts service works on mobile devices straight out of the box, compatible with Facebook’s mobile website and apps for Android and Apple iOS (iPhone and iPad).
The entire Gifts platform is the result of Facebook’s acquisition in May 2012 of an app company called Karma, as the Verge reported, and Karma’s founder Lee Linden became head of the new Facebook Gifts service and division.
It’s unclear, what if any cut Facebook takes of the Gifts sales itself, or whether it is monetizing the service purely through associated advertising. TPM has reached out to Facebook for further comment and will update when we receive a response.