With quick and simple onboarding, you can be ready to accept payments for all products and e-gift cards in no time at all. There are plenty of payment methods you can choose to accept, including all major credit cards, debit cards, and digital payments. A gift certificate is a prepaid gift card that can be used to purchase goods or services at a specific establishment or retailer. It serves as an alternative form of payment and is typically issued by businesses as a way to attract new customers or as a gesture of gratitude to loyal clients. Gift certificates are popular because they provide flexibility for both the giver and the recipient, allowing the recipient to choose their desired item or experience.
Expiration and Restrictions
From these early introductions, other retailers began to adapt a giftcard program to replace their gift certificate programs. You may purchase them to give as gifts to friends and family, or it’s possible that you might earn gift cards as a reward when shopping with a particular merchant. Understanding how gift cards work and where you can use them is important for avoiding fees or the risk of having a gift card expire. At the same time, it’s important to be on the lookout for gift card scams—especially during the holiday season, when more people are buying them and using them to shop. Depending on the card, it’s possible that a gift card may expire if the money loaded onto it is not used within a specific time period. You may also pay fees to activate a new gift card or reload money onto an existing gift card.
What’s the Difference Between E-Gift Cards and Physical Gift Cards?
Now, however, many of the major charge or credit card issuers, like American Express, Visa, Discover, and MasterCard, are also offering gift cards, good anywhere the regular plastic is accepted. Known as open-loop cards, these are most fasb drops step 2 from goodwill impairment test easily confused with prepaid debit cards, especially since some of them are reloadable as well. Gift cards are also given out by employers or organizations as rewards or gifts. They may also be distributed by retailers and marketers as part of a promotion strategy, to entice the recipient to come in or return to the store, and at times such cards are called cash cards.
Neiman Marcus and Blockbuster were later followed by the Mobil gas card, which initially offered prepaid phone value provided by MCI. Kmart was next with the introduction of the Kmart Cash Card, which in the early generations provided prepaid phone time with AT&T. Later Kmart and Mobil dropped this feature, as it was not profitable for them. The Kmart Cash Card was the first replacement for cash returns when a shopper did not have a receipt for a gift. This practice of giving a cash card in place of cash for non-receipted returns is commonplace today with most merchants.
Money is loaded onto a card which you or the gift card’s recipient can spend at accepted outlets. Physical cards are still the most popular, though recipients also enjoy the convenience of digital cards. While there are more gift cards now than ever—including multi-store cards, single store cards, and bank-issued cards—the best gift card is probably the one that a recipient will be happy to use.
Different Types of Gift Certificates
- Gift cards are subject to expiration dates and certain restrictions imposed by the issuer, such as usage limitations or fees.
- Money is loaded onto a card which you or the gift card’s recipient can spend at accepted outlets.
- At its crux, there are fundamental differences on the intention behind how gift cards and prepaid cards are to be used.
- Understanding how gift cards work and where you can use them is important for avoiding fees or the risk of having a gift card expire.
Some businesses allow you to add a personal message or the recipient’s name to make the gift more special. This adds a personal touch and shows that you have put thought into the gift. You can browse through the latest fashion trends, try on different outfits, and select the ones that make you feel confident and stylish. With a gift certificate in hand, you have the freedom to choose exactly what you want, without any limitations. A Visa gift card, for example, may be turned down because the purchase price is greater than the funds available on the card or because it has to be activated before it’s used. Check the gift card packaging or your receipt to learn when the card will become usable.
You may also pay a separate fee to reload money on a gift card if you wish to reuse it. An open-loop gift card can be used anywhere that brand of card is accepted. For example, if you have a gift card that’s branded with the Visa logo, you could use it to make purchases anywhere Visa is accepted. Yes, it’s possible to use a gift card to withdraw cash at an ATM if the card allows it. Typically, this is only an option with open-loop cards, which are not affiliated with any store or merchant brand. A gift card is a prepaid card that can be used to make purchases and execute other types of financial transactions.
Some businesses may also offer additional customization options, such as adding a personalized message or packaging the gift certificate in a special envelope or box. The table above summarizes some of the primary differences between a prepaid card and a gift card. At its crux, there are fundamental differences on the intention behind how gift cards and prepaid cards are to be used. In many instances, gift cards may be more commonly acquired to gift to someone else while a prepaid card may be more suitable for personal use.
Depending on the card in question, a reload fee may apply to add money each time. Gift cards can also be country-specific, and can be used to access USA-specific programming and media when outside the United States. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
A gift certificate is a document that represents a certain monetary value or a specific product or service. It acts as evidence of a tips for taxpayers who make money from a hobby financial transaction, indicating that the bearer has the right to use it for the designated purpose. Gift certificates can be physical cards or digital vouchers, and they generally have an expiration date. Gift cards are an especially popular gift around the holiday season for their convenience and ease-of-use. While many people want to support small businesses, that often falls flat in the face of convenience for last-minute gifts for coworkers or acquaintances.
Bank issued gift cards may be used in lieu of checks as a way to disburse rebate funds. Some retailers use the gift card system for refunds in lieu of cash thereby assuring that the customer will spend the funds at their store. Sometimes it’s hard to choose a gift for someone, and an open-loop card, from Visa or MasterCard, for example, lets the recipient buy what they want. And they can be useful for occasions, such as a wedding, to help the recipient cover costs from a particular retailer. You can also store codes for digital gift cards inside a mobile wallet app, such as Apple Pay or PayPal’s Venmo. Then, when you’re ready to check out, you can select your digital gift card as your preferred method of payment.
Redeeming a gift certificate is a straightforward process that can be done either online or in-store, depending on the seller’s policies. Gift cards often come with personalized designs and messages, making them a popular choice for those looking to add a personal touch to their gift-giving. Certificates may be more generic in appearance but still offer a practical and thoughtful way to present a monetary gift. Whether you want to give a small token of appreciation or a more generous gift, you can find a value that fits your needs.