Startup Giftly has opted to bypass the retailer on its gift cards by creating location-based virtual gift cards that become activated when the recipient is physically at the retailer the cards are intended for.  Once the recipient logs onto the Giftly website and verifies their location, they can have the gift card cash sent to a credit card, debit card, or paypal.  For the smart-phone-less recipients (like my mother-in-law) Giftly intends to offer the option of a Visa open-loop gift card.

It’s a neat idea certainly, but one has to wonder if receiving a virtual gift card that can’t actually be spent at the store is as gratifying as actually getting a piece of plastic that can be exchanged for real stuff.  It’s possible that a virtual gift card like this cross the line from thoughtful gift card (“Hey, you got me a Target gift card; I love shopping at Target”) to thoughtless gift card (“Wow, I actually have to spend my own money first to be able to buy something with this gift card.”).

Those considerations aside, Giftly offers several benefits over traditional gift cards, especially open-loop ones

• You no longer have to worry about having a few bucks left on your gift card that you can’t spend – it all gets sent to your credit card or PayPal.
• You can stack multiple gifts on the same card, making it much more likely you’ll be able to use them.
• Their gift card never expire (as long as the company is in business presumably).
• Your gift doesn’t have to be restricted to just one business but can include several or can just be used anywhere.
• Once a recipient unlocks the amount by visiting the store, they can spend it anywhere.
• You can make the gift card for ANY store, not just ones that actually have gift cards.

These alone might get me to buy a Giftly card for one of my friends or relatives that really appreciates gift cards instead of a traditional one.

Giftly, while they won’t spill all the beans on their yet to be released Visa gift card feature, claim they want to make it seamless to transfer money on and off those cards as well, which would go a long way to solving the last few bucks problem with open-loop gift cards and something we welcome.