A new service called GiftRocket is creating virtual gift cards that are tied to the recipient being in the vicinity of a specific location (based on a smartphones GPS reading) to redeem them.

GiftRocket, a Y Combinator-backed startup, is launching this week a service that marries the concept of virtual gift cards with location-based services.

Basically, GiftRocket lets you send money to a friend or relative in a snap, but also see to it that the transaction is effectively made only when the recipient ‘checks in’ to a certain location.

Hence, you could use GiftRocket to send $15 to a friend to sway him or her into checking out the breakfast offering at that coffee place you’ve been raving about, or you can gift your mother a $50 bouquet of flowers but only if she visits that new flower shop a couple of blocks away.

In my opinion, it is a toss up whether gift givers will actually want to make their friends or loved ones check in to a specific location to receive a virtual gift card or that recipients will bother.  But as one of GiftRockets founders points out:

There aren’t any new hoops to jump through. Just like you’d have to go to a store to spend a gift certificate, we want recipients to go to the business to spend their giftrocket.

And the recipient gets money transferred to their PayPal account, which is considerably easier to spend (and to spend all of it) than most gift card, especially open-loop ones.

Perhaps a service like GiftRocket will be a hit with parents, who can leave a trail of small gifts to get their children to visit all the right places each day or each week … like school, the library, or home.  Hmmm.