What are the assets and liabilities of Gift Cards?

how to buy the best gift card

With every festival comes the realization that it is time to gift your loved ones. With that comes a pandora’s box of questions, doubts, and confusion. This is becoming harder and harder since online shopping offers so much choice and variety. Moreover, almost everyone can buy exactly what they want, which eradicates novelty from any gift. Shopping for people with solid preferences or those whose choices you don’t know can be especially tricky. This is where gift cards come in handy.

Retailers have started offering gift cards. These can be used to give money or shop for items as a gift. Shopping can be done virtually or even in actual shops. E-gift cards are involved in gifting vouchers online, whereas physical gift cards can be used in person. There are several exciting features of gift cards. To know how they might be especially beneficial during the holiday season, keep reading.

What are gift cards?

Gift cards can be considered a kind of payment. They can be used as a replacement for money. Once bought, they can be used to shop at different locations, such as gas stations, shops, restaurants, etc.

Types of gift cards

There are two different kinds of gift cards. First, you might have come across gift cards that have a logo that is accepted anywhere. These can be used in a variety of locations where the brand is accepted. These kinds of gift cards are called open-loop gift cards.

Then there are gift cards that can only be redeemed at a specific location since they are purchased from a particular brand. Such gift cards are known as closed-loop cards. You can only shop at some retailers using such a card.

Another kind of classification involves physical cards and e-vouchers. Physical cards are pretty well-known. You buy an actual card or token from a location and redeem the card wherever it is accepted. Digital gift cards or gift vouchers online are used virtually. They involve a unique code or number. Entering this number onto an online shopping site allows you to redeem the card while purchasing online. These codes can also be stored inside certain mobile wallet apps. While making a payment, a gift card can be selected when you are asked to check out.

Some brands offer both variations. Some also offer physical cards that can be scanned using a card reader in the store. This saves time and makes the purchasing process more convenient.

Advantages of gift cards

Just like QR code payments and mobile wallet payments, gift cards can be fast and convenient. They avoid the hassle of gifting and using cash. As mentioned before, they can be a thoughtful gift when you are confused about the recipient’s choice. For instance, you may know that a loved one loves a particular brand. However, you may not be sure what exactly they might not be looking for. In such a circumstance, a gift card may make for the perfect gift. This would not only save you from making the wrong choice but also make them feel satisfied. In case you are unsure of the brand, open-loop gift cards make for a great option.

It may be challenging to shop for children sometimes. Given free rein, they may not be able to make a decision either. Gifting them a gift card would allow them to understand budgeting. By giving them a set limit, you can teach them how to spend money appropriately.

Gift Cards

Things to be careful about

If not used all at once, some money may be left in the gift card. This may be forgotten or too little to be able to buy something. This may lead to a potential waste of money. There may also be a fee charged for adding money while purchasing or reloading. It is also easy to lose them or have them stolen. If you do not use your card for a certain time, there may also be inactivity fees levied. If you choose a closed-loop card, they may limit choice and the ability to purchase what is required.

Thus, while choosing a gift card for your loved ones or yourself, the points mentioned above must be kept in mind. In addition, choosing between e-vouchers and physical gift cards or open-looped and closed-looped ones may make a difference in the shopping experience.

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