The concept is fairly simple, with a couple of caveats: You download the app, browse the restaurants and bars with which the app partners, and pick out specific food and drink items to send as a gift. You also can buy a gift certificate for any of the restaurants featured. The recipient shows the gift to the server on their phone when they arrive at the restaurant.
The app was designed with the idea that many people may still want to buy a drink for a friend even if they can't make it to a birthday or celebration gathering, and also just as a fun alternative for any type of gift. I can also see how it could be used as a fairly effective method of social media flirtation. A "like" on your sexy Facebook selfie is all well and good, but a whiskey sour from Seven Grand is more likely to seal the deal. You can (and probably should) also choose to prepay the tip on the gift.
The caveats: You (and the gift recipient) must have a smartphone (not all smartphones are supported) and be on Facebook, which is how you sign in to the app. Of course, as with most things Facebook-supported, the sign-in process gives the app a lot of your information. To use it you have to agree to this: "Gratafy would like to access your public profile, friend list, email address, birthday, events, current city and your friends' birthdays and current cities."
The recipient doesn't have to have the app to get a gift from you, but they will have to download it (and also agree to the above terms) to redeem their gift.
It appears that the prices on Gratafy are slightly higher than the prices you would pay at the restaurant, which presumably is how the app makes its money. For instance, at Mo-Chica (one of the L.A. restaurants the app currently offers as a gifting option) a Peruvian Maid cocktail costs $12, but you'll pay $13.50 to buy it for someone via Gratafy. This makes me think that the gift-certificate route probably is the more cost-effective gift.
There are currently 20 restaurants and bars in L.A. on the app, including all of Ricardo Zarate's places (Mo-Chica, Picca and Paiche). Sotto, Santa Monica Seafood and Cana Rum Bar (where you can gift the $20 annual membership) are also among the offerings. In Seattle, where the app has been up and running for less than a year, there are 67 restaurants participating. We certainly can see the appeal from a business owner's perspective -- the app is just another way to direct people to your business. Once there, they're probably likely to spend more than the value of their gift alone.
UPDATE: Gratafy writes to tell me that they don't upcharge on all gift items, only some, and that most of the price differences you see on the website vs. the menu is sales tax. When asked how, then, they make their money, they responded: "Gratafy takes a small percentage of only the gifts purchased through the platform; we do not take any piece of the overspend [money the customer spends in the restaurant once they are in the door, beyond the price of the gift], which is averaging over 500%. When you factor in this overspend, it makes the net effective cost of Gratafy on average in the 1%-2% range."
See also: The LA Weekly App: New and Improved