We all have heard about the term gift cards. Some of us might even have received one or brought one. But many around the world have just heard about gift cards but don’t have the slightest idea about them. So let us start with the basics.
A gift card refers to a prepaid card containing a limited amount of money that can be used to purchase some items or get some services. As this definition tells, gift cards can earn you items or services. People also receive or buy discount gift cards, which does not cover up the whole expense of any item but lowers the price of any item it is used upon.
Working On Gift Cards
The maximum of the gift cards presents out there contains a specified maximum and minimum initial loading amount. The most common minimum loading amount is $10, and the standard maximum loading amount is $500.
These gift cards pay for a portion of the purchase and cash, debit card, or credit card in some circumstances. To prevent the loss of benefits if the card is lost or stolen, people can register their gift cards online. This option gives people the safety feeling and is why some consider gift cards safer than cash.
Types Of Gift Cards
Gifts cards are of two types, closed-loop gift cards, and open-loop gift cards. There has also been a rise in another category of gift cards known as digital gift cards. Let us discuss these types further.
Closed-Loop Gift Cards
Stores mostly offer or store these closed-loop gift cards. This type of gift card allows the cardholder to buy anything from that specified retailer. Single merchants, either online or offline, are allow the customers to use closed-loop gift cards. You can use the gift card in any store if one company may see different stores or retailers, and only if the company issues the gift cards in that way.
Closed-loop gift guys do not require any activation fees. They also do not include any form of processor’s logo; instead, they include the merchant’s logo. This helps and makes the gift cards act as an advertisement for the store.
Closed-loop gift cards are not reloadable, which means that when the balance reaches zero, the cards are useless after that. The funds on the closed-loop gift cards also tend to have an expiration date, making them use the gift card within the specified timeframe.
Closed-loop gift cards are the most popular gifts for wedding and baby registries. Many merchants provide these gift cards to customers as bonuses for signing up to their registries.
Open-Loop Gift Cards
Open-loop gift cards closely resemble case or, more accurately, a credit or debit card, as they can be used at any store or any online site where the card is accepted. Many significant companies provide open-loop gift cards. These cards include the processor’s logo and allow cardholders to make all sorts of electronic payments.
Open-loop gift cards have an additional advantage of serving as a standard prepaid card. These cards are reloadable that allows the cardholder to add funds to the card on their own free will. Unlike closed-loop, these gift cards require an activation fee during the time of purchasing the card.
Digital Gift Cards
Through closed-loop and open-loop gift cards dominate the market; digital gift cards have seen a rise in demand. People buy and sell Amazon gift cards almost regularly.
Sometime before, some companies started offering e-Gift Cards to their customers. These gift cards are only for the loyalty program members or other regular customers and not to everyone.
These gift cards, unlike the closed and open-loop gift cards, do not have any physical form. Though open and closed groups are can be used online, and in any store in person, the digital gift cards are online accessible for online shopping.
Protecting Gift Cards From Thefts
In an earlier time, gift cards were more prone to stealing and loss. The gift cards then were like cash. If a person buys a discount gift card and then loses it, it was like cash is gone and is less prone to retrieve back.
Nowadays, one can take the gift cards from the bank, which allows cardholders to register their gift cards with the card issuer to get protection from loss or theft. Some retailers provide such retail gift cards.
To register the gift cars, one has to call the number or go to the website listed behind the card, and then the issuer will ask for your pin, card expiration date, PIN, and your name and address. After this process, they assure you that even if you lose your gift cards or even if it gets stolen, they have your details, and the funds are protected.
Treat Gift Cards Gently
Gift cards are meant to be used for giving as gifts and sometimes can even be used to earn money. Suppose someone receives Amazon gift cars; they can gift it, use it, or sell Amazon gift cards.
Either way, people tend to take significantly less care of the cards and act harshly on the card. The gift cards contain magnetic strips and bending, throwing, exposing to heat or water, etc. can harm the whole card itself. These magnetic strips are prone to get demagnetized by other stuff in your pockets or purse where you keep the cards. One should always gently treat gift cards and treat them just like your credit and debit cards due to these magnetic strips.
Gift cards are the rising medium for getting discounts and getting items and services for free. Gift cards come in two forms- closed and open-loop gift cards. Nowadays, these gift cards are less prone to theft and loss due to registering the cards to the issuer. Lastly lays the problem of harming the card. To prevent any harm and destruction to the card, one must treat them gently.
Interesting related article: “What is a Voucher?“