Gift Cards – Definition & Detailed Explanation – Types Of Gifts Glossary

What are gift cards?

Gift cards are prepaid cards that can be used as an alternative to cash for purchases at a specific retailer or group of retailers. They are typically purchased in a specific monetary amount and can be given as gifts to friends, family, or colleagues. Gift cards are a popular choice for gift-giving occasions such as birthdays, holidays, and special events.

How do gift cards work?

Gift cards work by allowing the recipient to use the card to make purchases at the designated retailer or retailers. The card is typically activated at the time of purchase and can be used until the balance reaches zero. Some gift cards can be reloaded with additional funds, while others are for one-time use only.

What are the different types of gift cards?

There are several different types of gift cards available, including:

– Retailer-specific gift cards: These cards can only be used at a specific retailer or group of retailers.
– Open-loop gift cards: These cards are typically branded with a major credit card logo and can be used at any retailer that accepts that type of card.
– Closed-loop gift cards: These cards can only be used at the retailer or group of retailers specified on the card.
– E-gift cards: These are digital gift cards that can be purchased and sent electronically via email or text message.

Who uses gift cards?

Gift cards are used by a wide range of people for various reasons. Some common users of gift cards include:

– Individuals looking for a convenient gift option for friends and family.
– Businesses looking to reward employees or thank clients.
– Non-profit organizations using gift cards for fundraising purposes.
– Retailers offering gift cards as a promotional tool to attract customers.

How can gift cards be redeemed?

Gift cards can be redeemed in-store, online, or over the phone, depending on the retailer’s policies. To redeem a gift card, the recipient simply presents the card to the cashier at the time of purchase or enters the card information during online checkout. The amount of the purchase is deducted from the card balance until it reaches zero.

Where can gift cards be purchased?

Gift cards can be purchased at a variety of locations, including:

– Retail stores: Many retailers offer their own gift cards for purchase in-store or online.
– Grocery stores: Some grocery stores sell a selection of gift cards for popular retailers and restaurants.
– Online retailers: E-commerce websites like Amazon and offer a wide range of gift card options for purchase.
– Gift card kiosks: These are standalone machines found in malls and other public spaces that sell a variety of gift cards for different retailers.

In conclusion, gift cards are a versatile and convenient gift-giving option that can be used by a wide range of people for various purposes. With the ability to be purchased and redeemed at a variety of locations, gift cards offer flexibility and choice for both the giver and the recipient.