How To Use a Gift Card

Gift card

First of all, what is a gift card? A gift card has a monetary value to be spent by the bearer as opposed to a non-monetary item or gift. It is commonly issued by banks, retailers or business companies and stores. It is commonly used in United States and in fact, ranked as the second most given gift by consumers in 2006; the most wanted gift by women and the third most wanted by men. Gift cards are commonly used as they give peace of mind that the receiver will buy what they wish with the gift card. It just depends on the recipient of the card as to how they will use it so long as it is within the restrictions of the party who issued it.

Basically, a gift card can be used like a cash card, prepaid card, visa card or debit card. Some cards can be used by reloading so they can be used several times. A gift card usually comes as a plastic card, the same size as those mentioned, which is identified through a specific number or through a code. It is supported by an on-line electronic system for authorization and balance check-offs. Any holder can use it since it usually doesn’t come with a name, so it can be used by anybody. In such case, better keep it safe because if lost, it cannot be replaced by the issuer of the card - anyone, even a thief, will have privilege of using your gift card.

Gift cards have barcodes or magnetic strips, which are used by an electronic credit card machine to identify the card as you swipe it. Thus, you need to be careful in using it. Some cards require loading of cash for you to use it, as in the case of a cash card. It needs entering of the amount that the user wants to put on the card. It is then noted in the database and is then linked to the card ID. In cases of using it in accredited malls and stores, the amount you use is also deducted on their database.

There are different types of gift cards with different requirements for use:

  1. Open Loop. This is given by banks or credit card companies and can be used by different stores or establishments.
  2. Closed Loop. The closed type on the other hand, can only be used upon permission of the provider.
  3. Hybrid Closed Loop. This is a new type of gift card. It is similar to closed loop cards only that the provider includes several closed loop cards in one package. This is commonly used in malls.

Some people may associate a gift card with a gift certificate, but they actually differ from one another. A gift certificate is issued as a paper document along with a signature by the issuer to show authorization. It is commonly used in stores, restaurants and other establishments. A gift card on the other hand, since it works in the same way as a cash card, prepaid card, visa card or debit card, requires electronic authorization and notification instead of a mere signature. And of course it requires being swiped in an electronic machine in exchange for the specified item.

So there you have it - all you need to know about how to use a gift card.


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