Facebook is retiring its physical gift offerings as part of a greater effort to focus on gift cards. Launched in September 2012, Facebook Gifts enabled members to purchase tangible goods — such as flowers and wine — to send to friends. But while consumers might not be too happy, this shift is ultimately better for businesses.

Maintaining the physical goods delivery operation is extremely complicated, and requires working with many partners to keep up with inventory tracking, fulfillment, and delivery. The most important piece of the puzzle is customer service — there’s no telling how many people inside Facebook are devoted to maintaining this program.

Moving forward, the social network will phase out physical gifts in favor of digital gift codes or the Facebook Card, a credit-style card that allows consumers to keep multiple balances for different retailers on the same card. According to Facebook, these two option already make up about 80 percent of sales.

Over the weekend, 10 percent of Facebook’s U.S. user base received the redesigned version of Gifts that eliminates physical gifts. The rest of the U.S. will get it over the next few weeks. In addition to going digital, the social network also made adjustments to the product and buying experience.

Gifts will now have its own Gifts marketplace landing page, and each brand will get its own URL for their gift shop. This means that businesses can share a direct link with consumers instead of instructing them to find you inside the cluttered Gifts window. You can even purchase Promoted Posts ads to send more traffic to your store.

The social network will also begin factoring in people’s check-ins into recommendations. For example, if someone’s friend checks in at Starbucks, Facebook might suggest he or she buy that friend Facebook Gift Card credit to the coffee chain. Consumers will also be able to purchase gift credit in any denomination — $29 for a 29th birthday.

This shift should be better for businesses in the long run. Not only is Facebook taking the guess-work out of gifting, but it’s doing so in such a way that consumers will find easy, helpful, and familiar. If you’re looking to increase sales through the social network, this is a good way to do it — especially for e-commerce platforms.

[Via: TechCrunch, Image credit: playerx]