Electronic Catalog: A Frog or a Prince?

FrogMagic.com allows admirers to send gifts anonymously — raising questions about the recipients’ online privacy

Rob Hansen knows about the business of online courtships. “I met my wife online, before you could admit that sort of thing,” says the CEO/president of online gifts service FrogMagic.com. The San Francisco-based company lets dot-com Romeos — and other online shoppers — send gifts anonymously. What’s more, the givers don’t even have to know the name — let alone the street address — of the recipient. If they have the recipient’s e-mail address, chat room ID, or instant-message ID, they can send a gift.

But delivering gifts from an online admirer to an intended paramour raises some questions about the privacy of the gift recipients and senders throughout the transaction. If a once-flattered recipient suddenly feels pestered by an admirer’s offers, can he or she refuse the gifts? And would the sender be able to track down the personal information of an unwilling recipient?

Jared Polis, the founder of online greeting card site BlueMountain.com, founded FrogMagic.com in August 1999. The company’s Website offers flowers, jewelry, greeting cards, and flowers. While 30% of the company’s business is from people who are sending gifts to people they also know offline, “70% is generated by people sending gifts to people they know only through instant message devices, chat rooms, and online romance communities,” Hansen says. “We’re partnered with 10 online dating services, such as YouDate.com and Match.com.”

Members of the dating services can link to the FrogMagic “send a gift” icon on the services’ Websites, or they may visit FrogMagic.com directly to select a gift to be sent to a particular person. The gift giver can personalize a message, offering his or her gift, to be sent to the intended recipient’s e-mail address or chat roomr ID. At that point, the recipient can accept or reject the gift, with or without explanation.

Upon accepting a gift, the recipient enters his or her ship-to information, and the sender’s credit card is charged. “Until the gift is accepted and paid for, we hold it,” Hansen says.

FrogMagic.com partners with about 35 manufacturers and online merchants such as ProFlowers.com and GiveChocolate.com that fulfill and ship the orders. Hansen would not disclose the company’s annual sales but says the average order size is $45. Not surprisingly, sales spike around Valentine’s Day and Christmas: “Our 2000 holiday sales were up more than 50% from 1999.”

But romantics aren’t FrogMagic.com’s only customers. Members of online support groups, Hansen says, use FrogMagic.com to send gifts such as paper greeting cards or flowers to fellow members. “And about 8% of our business is to corporate buyers” who use the service to send gifts to clients, Hansen says. In fact, FrogMagic.com hopes to expand its corporate buyer base with the launch of a business-to-business print catalog this spring. “The catalog will be about 10 pages, with 12 products on each page, and we’ll be targeting Fortune 1000 companies,” he says, though he would not disclose the planned circulation.

ROMANTIC OR CREEPY? While it sounds somewhat romantic, the business of facilitating gifts from, in many cases, anonymous admirers can push the boundaries of privacy. “But the sender never knows the recipient’s address,” Hansen says. Buyers and senders can’t contact the gift vendor to track the shipping or the billing information. “Orders are given [specific] FrogMagic.com order numbers and corresponding order numbers from the vendor, which are impossible to crack,” he insists.

The site’s privacy policy indicates that information on the site is “never shared with other sites or partners except in aggregate and only in such a way that it cannot be linked to an individual user,” Hansen says. “We also offer consumers a chance to opt in if they want to be contacted by us in the future.” The site is endorsed by VeriSign, a Mountain View, CA-based online security program that guarantees the site’s orders, and by San Jose, CA-based TRUSTe, a nonprofit organization that evaluates Websites’ privacy practices.

Assurances aside, Hansen says some 30% of gift recipients still call FrogMagic.com to verify the company’s legitimacy and privacy stance before accepting their gifts. About 0.5% of intended recipients refuse gifts.

Some privacy advocates remain skeptical about the business. “FrogMagic has its bases covered, but a mysterious gift offer from anyone raises questions,” says Sydney Rubin, spokesperson for the Washington-based Online Privacy Alliance, a coalition of more than 100 companies and trade associations that strives to build online consumer confidence.

Perhaps most surprising is that of FrogMagic’s more than 200,000 buyers, 65% are women. “A smaller percentage of men send to multiple women,” Hansen says, “many of whom return to Frog Magic to send gifts to others.”

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