Gift cards are very similar to prepaid debit cards. A specific amount is loaded into them, which can then be used to purchase from certain traders. They can either be used online or by visiting the stores physically.
It is quite difficult to fathom the fact that gift cards did not come into existence until 1994. A man named Neiman Marcus began selling them, and the world should be ever grateful to him for his distinctive thought.
Closed loop versus open loop cards
Gift cards fall under two categories, each having their unique purpose. The closed loop ones are generally offered by retailers and can only be used in their particular stores. Such cards are solely meant for single-use and come with an expiry date.
On the other hand, open loop gift cards can be considered as an alternative for cash. They are mostly offered by major credit card issuers like Visa, MasterCard, and American Express and can be used multiple times as they can be reloaded. Open loop gift cards can be used for various merchants, wherever the card is accepted. Closed loop gift cards can, too, be used for multiple retailers only if they happen to be the affiliates of the providing company. However, due to being reloadable, open loop gift cards require an activation fee of around $5.
The money loaded in gift cards can vary from as less as $10 to a hefty amount of $500. The global gift card market is expected to be worth $506 billion by 2025, as claimed by Persistence Market Research.
Digital gift cards
In comparison to the physical ones, the hype for digital gift cards is growing with every passing day. Where the old school gift cards have a growth rate of just 6%, digital gift cards or eGift cards are growing at an annual rate of 200%. Many stores, namely Domino’s gives out discounted dominos pizza gift cards besides delivering mouth-watering pizzas, enabling them to have a 25% share of the entire gift card market while the rest 75% still belongs to the physical cards.
The gift card etiquette
Gift cards can be the best gift given to people who are choosy, and you think it is difficult to purchase for. It gives them the opportunity to buy things for themselves as per their desires and leaves no room for complaints.
But how much money should you give out through your gift card? Well, there are no set rules as it entirely depends on your budget, but slight estimations can still be made.
While choosing a gift card for your colleague or common friends, an amount of $10 – $20 should be fine. If you are looking to gift it to your dear friends or relatives, then the amount may go slightly higher to $25 – $100. But if you are to present it to your parent, better half or someone who holds a special place in your heart, then an amount of $75 or more could be given out.
Mind you, handing over a gift card just like that may fail to impress the receiver. Make sure to add a few personal touches to it. You may include a small handwritten note or put it in a colorful envelope to make it meaningful and make the person receiving it understand how much they mean to you.
If you think you are running low on your budget and cannot add a touch of love to them, then you must not worry at all as you can get your hands on a large array of such cards due to the gift card sale which takes place every now and then.
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