On the other hand, for the recipient, gift certificates provide an opportunity to treat themselves without worrying about overspending. They can indulge in a luxurious spa treatment, enjoy a gourmet meal at a fancy restaurant, or purchase that tech gadget they’ve been eyeing for months. With a gift certificate, they can enjoy these experiences guilt-free, knowing that the cost has already been covered. Consumer preferences may vary when it comes to choosing between gift cards and certificates. Some individuals may prefer the flexibility of gift cards, while others may appreciate the simplicity and one-time use nature of certificates. Gift cards are subject to expiration dates and certain restrictions imposed by the issuer, such as usage limitations or fees.
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However, despite their similarities, there are key distinctions between the two that are important to understand. If you’re interested in using gift cards to help kids learn the basics of spending, you may want to research prepaid debit cards for teens. A gift card—also known as a stored value card—is a form of payment that can be used to make purchases at retail stores, gas stations, restaurants, and other locations.
Many reputable businesses offer gift certificates without expiration dates or fees to ensure a positive customer experience. Gift cards may have an expiration date after which the remaining balance is lost, but prepaid cards do not usually have an expiration date but may have a monthly maintenance cost after a specified amount of time. In addition, a gift card is tied to a specific company that may go bankrupt which would hinder the ability to use the gift card. Certificates, on the other hand, are also issued by merchants and hold a monetary face value. Similarly to gift cards, certificates can be used for the purchase or delivery of goods or services from the issuer.
Some businesses may also offer additional customization options, such as adding a personalized message or packaging the gift certificate in a special envelope or box. The table above summarizes some of the primary differences between a prepaid card and a gift card. At its crux, there are fundamental differences on the intention behind how gift cards and prepaid cards are to be used. In many instances, gift cards may be more commonly acquired to gift to someone else while a prepaid card may be more suitable for personal use.
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Money is loaded onto a card which you or the gift card’s recipient can spend at accepted outlets. Physical cards are still the most popular, though recipients also enjoy the convenience of digital cards. While there are more gift cards now than ever—including multi-store cards, single store cards, and bank-issued cards—the best gift card is probably the one that a recipient will be happy to use.
You can easily accept a variety of payment methods, including credit cards, digital wallets, and many more. These cards can only be redeemed at the stores and restaurants that sell them. Bank gift cards, which carry the logo of a payment card network (e.g., Visa, MasterCard), are also subject to Credit CARD Act protections and can be used wherever the brand is accepted.
- You may also want to notify the Federal Trade Commission (FTC), which tracks scams and frauds.
- Pay.com can help get you set up with an integrated checkout page right on your website.
- A gift card may resemble a credit card or display a specific theme on a plastic card the size of a credit card.
When weighing the pros and cons of gift cards, it’s important to understand the distinction between them and prepaid debit or credit cards. A gift card is a prepaid debit card that contains a specific amount of money available for use for a variety of purchases. Scammers often use gift cards as a way to defraud people of their money because they’re just like cash – any misuse is hard to trace. Unlike credit cards, there typically isn’t any recourse for consumers when a gift card is stolen or used without authorization, so it is very hard to reverse the purchases or get a refund in these situations.
Company
Some businesses allow you to add a personal message or the recipient’s name to make the gift more special. This adds a personal touch and shows that you have put thought into the gift. You can browse through the latest fashion trends, try on different outfits, and select the ones that make you feel confident and stylish. With a gift certificate in hand, you have the freedom to choose exactly what you want, without any limitations. A Visa gift card, for example, may be turned down because the purchase price is greater than the funds available on the card or because it has to be activated before it’s used. Check the gift card packaging or your receipt to learn when the card will become usable.
Depending on the card in question, a reload fee may apply to add money each time. Gift cards can also be country-specific, and can be used to access USA-specific programming and media when outside the United States. Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia.
Conversely, certificates may have less flexibility in terms of expiration and are typically more straightforward in their usage policies. Generally, the purchaser of an e-gift card can choose the amount of money that goes on it, but some merchants may choose to have pre-set amounts for sale as well. After completing the purchase, you will receive a physical gift certificate that can be presented to the recipient. The certificate may come in an elegant envelope or a decorative holder, making it a visually appealing gift.
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Bank issued gift cards may be used in lieu of checks as a way to disburse rebate funds. Some retailers use the gift card system for refunds in lieu of cash thereby assuring that the customer will spend the funds at their store. Sometimes it’s hard to choose a gift for someone, and an open-loop card, from Visa or MasterCard, for example, lets the recipient buy what they want. And they can be useful for occasions, such as a wedding, to help the recipient cover costs from a particular retailer. You can also store codes for digital gift cards inside a mobile wallet app, such as Apple Pay or PayPal’s Venmo. Then, when you’re ready to check out, you can select your digital gift card as your preferred method of payment.
A gift certificate is a document that represents a certain monetary value or a specific product or service. It acts as evidence of a financial transaction, indicating that the bearer has the right to use it for new able account advantages the designated purpose. Gift certificates can be physical cards or digital vouchers, and they generally have an expiration date. Gift cards are an especially popular gift around the holiday season for their convenience and ease-of-use. While many people want to support small businesses, that often falls flat in the face of convenience for last-minute gifts for coworkers or acquaintances.
With quick and simple onboarding, you can be ready to accept payments for all products and e-gift cards in no time at all. There are plenty of payment methods you can choose to accept, including all major credit cards, debit cards, and digital payments. A gift certificate is a prepaid gift card that can be used to purchase goods or services at a specific establishment or retailer. It serves as an alternative form of payment and is typically issued by businesses as a way to attract new customers or as a gesture of gratitude to loyal clients. Gift certificates are popular because they provide flexibility for both the giver statement of owner’s equity and the recipient, allowing the recipient to choose their desired item or experience.
You may also pay a separate fee to reload money on a gift card if you wish to reuse it. An open-loop gift card can be used anywhere that brand of card is accepted. For example, if you have a gift card that’s branded with the Visa logo, you could use it to make purchases anywhere Visa is accepted. Yes, it’s possible to use a gift card to withdraw cash at an ATM if the card allows it. Typically, this is only an option with open-loop cards, which are not affiliated with any store or merchant brand. A gift card is a prepaid card that can be used to make purchases and execute other types of financial transactions.