Mobile gift cards are experiencing a major growth spurt, especially in the most digital and cultural cities of North America, where several restaurants and bars in San Francisco including Dosa, Yank Sing, St. Vincent, Nice Ventures’ Terzo, Rose’s Café, Rose Pistola and Michael Chiarello’s Coqueta have all developed relationships with mobile gifting service Gratafy.

Recently announcing the addition of 600 new gift items to its digital network of merchant partner storefronts, Gratafy users can now select from more than 2,500 menu items from eateries and bars expansive in Seattle, Chicago, Los Angeles, and now San Fran. Retailers favor digital gift cards because they allow customers to purchase gifts and instantly send them, which appeals to procrastinators and is a cost reductive tactic for merchandisers as well.

“Gratafy is all about the user experience, from providing the best food and drinks at local spots, to allowing people to make personal connections,” said Raquel Barrett, vice president of marketing, Gratafy, Seattle.

“We quickly found that people wanted to be able to connect beyond their social networks and built a new version of our product allowing users to do so,” she said. “Now with Campaign gifting, our new batch gifting solution, Gratafy is a great tool for outside companies to use to stay in touch with past and prospective clients or to incentivize a sales team.”

Mobile culture
Still young, the 2012-founded company was ignited by cities rich in tech-savvy consumers, wild nightlife and a bustling dining culture.

Users can send gifts through multiple channels including Gratafy’s Web site, mobile site or Gratafy’s free iPhone or Android application.

Users can also purchase gifts directly from merchants’ Web site or Facebook fan page via Gratafy widgets.

Consumers are able to choose a specific item like a glass of champagne or may choose a gift certificate. They then designate their recipient via Facebook or by entering a cell phone or email address.

Gifts are immediately delivered via email, text, or Facebook, and recipients can redeem the gift when they dine at their selected restaurant or bar by providing the server with a three-digit code from the app for complete Gratafication!

Local expansion
Gratafy has a sales team on the ground in San Francisco with plans to expand locally. To advertise and market the service, Gratafy has a dedicated market manager in each city that is responsible for driving brand awareness and user acquisition through both the merchant and consumer channel via events, in-venue collateral, campaign gifting, sponsorships and local partnerships.

Gratafy also advertises online and on social networks and implementing a robust digital retention strategy, and will also be announcing additional products later this year.

The startup partners with a range of establishments from high-end restaurants to sports bars and provides a wide selection of gift items at every price point from cocktails to entrees. Based on merchant partner feedback, Gratafy also recently added digital gift certificates to its arsenal.

Unlike other hospitality gifting platforms, Gratafy integrates directly with the restaurant or bar’s point of sale system, enabling a seamless redemption experience for both the customer and the merchant.

Gratafy has now formed relationships with more than 500 restaurant and bar locations across the U.S. and plans to continue its national rollout in the months to come.

To date, merchant partners on the system have seen an ROI in excess of 1500 percent due to the large amount of overspend that occurs at the time of gift redemption.

Gratafy also announced today that it is launching Gratafy Valet – a merchant-facing platform that lets its partners’ access additional products that complement the core consumer gifting program, the first of which are Campaign Gifting and Gratafy Widgets.

Campaign gifting is a marketing tool that restaurants can use to thank and engage their customers. Gratafy Widgets give consumers an easy way to find and send gifts right from the restaurant’s Web site or Facebook fanpage.

“Gratafy appeals to restaurant and bars because it allows them to open a new stream of revenue by selling their unique menu items online as gifts,” Ms. Barrett said.

“Unlike other hospitality gifting-platforms, Gratafy has patent-pending point of sale technology that provides a seamless redemption experience for both the gift recipient and the restaurant staff.”

Final Take:
Michelle is editorial assistant on Mobile Commerce Daily, New York