Gift cards using a payment infrastructure was first introduced by Neiman Marcus in 1994. A gift card ,aka a gift certificate or gift voucher or gift token, is a prepaid debit card which a retailer or bank issues as an alternative to cash. It contains a specific amount of money available for use on a variety of electronic payment purchases. You generally can’t cash out but they are only redeemable for purchases at the relevant retail premises. These cards have become popular for birthdays, graduations, and all other “gift giving” occasions since they give the recipient the opportunity to pick out what they actually want.
Types of gift card
There are generally two types of gift card, open loop and closed loop cards, both of which can be used online and in person. Below we are going to explain these types in a more detailed way:
You can use fist type at any merchant where accepts the payment card processor. They are sponsored by companies like Visa, American Express, MasterCard and Discover. They can also make all types of electronic payments nearly anywhere.Open loop gift cards or cash cards can serve as a standard prepaid card. These cards are usually reloadable which allows the user to add funds on their own as well. These cards sometimes require an activation fee of around $5 which you must pay. Cash cards offer flexibility but you can not personalize them.
Pros and cons of a digital gift card
Gift cards are generally good for those who might lose their cash. Since digital gift cards are not really replaceable but very difficult to lose. Physical gift cards usually need to be registered in to provide a level of protection in case of loss. The idea of gift card is generally useful for monitoring younger shoppers since you can limit the amounts and restricts the locations where they might use the card. There is no time limit for most gift cards and some allow customers to reload for which there is often some amount of fee. Another advantage of a gift card is that it can make the gift-giving process much easier, especially for people that are hard to shop for.
On the other hand a gift card might seem like a lazy gift at some occasions but it’s not always so and many people enjoy the freedom of will that these cards give them.
What to do with a gift card you don’t need?
In case you have received a gift card you don’t need you can donate it to some kind of charity. There are also some sites which will purchase your gift card at a very high percentage of its value. Trading it for items you’re interested in from other sellers can be a good option too.
Try to be careful while you are getting someone a gift card. Besides, if someone has given you one of these cards try to use it immediately so you won’t forget about it.