Gift Card
Definition
A gift card is a prepaid card issued by a retailer or bank, usually to be used as an alternative to cash for purchases at a specific store or stores. Gift cards are commonly available in various denominations and typically carry an expiration date. They can be physical cards or digital e-cards, often used for gifting purposes.
Examples
- Retailer Gift Card: A gift card issued by a retailer such as Amazon, Walmart, or Best Buy can only be used to make purchases at their respective stores.
- Multi-Store Gift Card: Some gift cards, like Visa or Mastercard prepaid gift cards, can be used at multiple locations wherever those cards are accepted.
- eGift Card: Digital versions of gift cards delivered via email or text message. These can be redeemed online or in-store by showing the digital code to the cashier.
Frequently Asked Questions
What is the difference between a gift card and a prepaid card?
Gift cards are generally issued by retailers for their specific stores, while prepaid cards are usually issued by financial institutions and can be used wherever the payment network (like Visa or Mastercard) is accepted.
Can a gift card be reloaded?
Some gift cards, known as reloadable gift cards, can have additional funds added to them. However, this depends on the issuer’s terms and conditions.
Do gift cards expire?
Most gift cards have an expiration date after which they cannot be used. Some may also apply service fees if not used within a certain period.
Can I get cash back from a gift card?
Typically, gift cards cannot be redeemed for cash, except in cases required by law for small outstanding balances.
What should I do if my gift card is lost or stolen?
Contact the issuer immediately to report a lost or stolen gift card. Some issuers provide a replacement card if you can provide proof of purchase or card details.
- Credit Card: A payment card issued by financial institutions that allows cardholders to borrow funds with which to pay for goods and services.
- eGift Card: A digital version of a physical gift card that can be sent electronically via email or SMS.
- Prepaid Card: A type of payment card that is preloaded with a certain amount of money and can be used to make purchases or withdraw cash.
Online References
Suggested Books for Further Studies
- “Gift Cards, Fraud, and Consumer Protection” by Patricia Hackett
- “Gift Cards for Dummies” by Nicholas Francais
Fundamentals of Gift Card: eCommerce Basics Quiz
### What is a common use for gift cards?
- [x] Purchasing goods and services.
- [ ] Securing loans.
- [ ] Earning interest.
- [ ] Buying stocks.
> **Explanation:** Gift cards are primarily used for purchasing goods and services up to the limit of the stored value.
### Can a gift card be used like a credit card?
- [x] Yes, but only up to the limit of stored value.
- [ ] Yes, with no limitations.
- [ ] No, gift cards and credit cards function entirely differently.
- [ ] Yes, and they accrue points or rewards like a credit card.
> **Explanation:** A gift card is used much like a credit card but only up to the limit of the stored value encoded in it.
### Which entity typically issues gift cards?
- [ ] Governments.
- [x] Retailers or banks.
- [ ] Non-profit organizations.
- [ ] Educational institutions.
> **Explanation:** Gift cards are usually issued by retailers or banks.
### What action should you take if your gift card is lost or stolen?
- [x] Contact the issuer immediately.
- [ ] Report it to the police.
- [ ] Inform your bank.
- [ ] Do nothing, as gift cards cannot be replaced.
> **Explanation:** If a gift card is lost or stolen, you should contact the issuer immediately for assistance.
### Can gift cards expire?
- [x] Yes, most gift cards have an expiration date.
- [ ] No, they never expire.
- [ ] Only credit cards expire, not gift cards.
- [ ] Gift cards expire after five years by default.
> **Explanation:** Most gift cards have an expiration date, after which they cannot be used.
### Is it possible to reload funds onto a gift card?
- [x] Yes, for some reloadable gift cards.
- [ ] No, gift cards cannot be reloaded.
- [ ] Only digital gift cards can be reloaded.
- [ ] Yes, but only at the issuing store.
> **Explanation:** Some gift cards, known as reloadable gift cards, can have additional funds added to them.
### What is an eGift card?
- [x] A digital version of a physical gift card.
- [ ] A credit card bought online.
- [ ] A prepaid phone card.
- [ ] An in-store loyalty card.
> **Explanation:** An eGift card is a digital version of a physical gift card that can be sent electronically via email or SMS.
### Which type of gift card can be used at multiple locations?
- [ ] Store-specific gift card
- [x] Multi-store gift card, like Visa or Mastercard prepaid gift cards.
- [ ] Promotional gift card
- [ ] Both store-specific and multi-store gift cards
> **Explanation:** Multi-store gift cards, such as Visa or Mastercard prepaid gift cards, can be used at multiple locations.
### What is the major benefit of using a gift card?
- [ ] It earns interest like a saving account.
- [x] It can be used for specific purchases at designated stores.
- [ ] It can be converted to cash.
- [ ] It never expires.
> **Explanation:** The major benefit of a gift card is that it can be used for specific purchases at designated stores.
### Why is it recommended to keep the receipt of a gift card purchase?
- [ ] For gift card points accrual.
- [ ] To prove ownership in case of a reward program.
- [x] For potential replacement if the card is lost or stolen.
- [ ] For warranty claims on the card.
> **Explanation:** Keeping the receipt is recommended for potential replacement if the gift card is lost or stolen.
Thank you for exploring the fundamentals of gift cards and taking the basics quiz. Continue enhancing your knowledge of consumer payment methods to stay ahead!
