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What is a Gift Card?

By R. Kayne
Updated May 16, 2024
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People who want to get a gift for someone but don't quite know what to choose might consider a gift card. Similar to a gift certificate, it looks more like a credit card, with a magnetic strip on the back that logs the amount of money that the card holds. The recipient can use it like a credit card, spending up to the card's value at the store designated on the gift card or, if no specific store is named, whenever he or she chooses.

Virtually all major stores issue gift cards for the asking. The card must be spent in the store where it was purchased or, if the store is part of a chain, any outlet will redeem it. It is also possible to buy cards that can be used in a selection of stores that all belong to the same parent company or that are all located in the same location, such as a shopping mall. Many credit card issuers also make gift cards available, and these can be spent anywhere that accepts the credit from that issuer.

Most gift cards have no expiration date, although a few are only good for a year from when they are issued. The money on the card also does not have to be spent at once. If the purchase is less than the amount of the card, a balance of credit remains. The holder need not keep track of the balance, as a quick scan of the magnetic strip at the register will reveal this information.

A gift card often feels like a credit card that the user never has to pay off. This makes it fun to receive and also to spend. It also allows the recipient to do his own shopping, getting himself exactly what he needs or wants most.

Many types of businesses, including beauty shops and spas, also issue gift cards. This is a great way for a person to give someone he knows a makeover or a little pampering without trying to arrange a specific appointment. With the card, the receiver can treat herself to something she would never do for herself, or would put off indefinitely, at a time that suits her schedule.

With the love affair people have with credit cards, a gift card of any denomination is sure to be appreciated. It can also fit nicely inside a greeting card, and some businesses will even place one in a small elegant box and wrap it with a ribbon. The denomination is also included on an insert so the receiver will know how generous the giver has been.

While each store has its own policies, normally a gift card cannot be exchanged for cash. The value of a returned item that was purchased with a gift card will be added back to the card. In many cases, if purchases leave a balance of less than $5.00 US Dollars (USD) remaining on the card, the holder might receive change back, if requested, to close the card out. Rules governing these finer points are at the discretion of the issuer.

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Discussion Comments
By sunshine31 — On Oct 18, 2010

Sunny27-I buy the Dave and Busters reloadable gift card. That way whenever I go back with my kids, I just give them the card and they add in the amount that I want.

If you don’t have the card then they charge a few dollars extra for it. I usually try to go on Wednesdays during the summer because they offer double ticket days and my kids can play twice as much. I know Game Works does the thing.

By Sunny27 — On Oct 18, 2010

BrickBack-I know what you mean, for Christmas I usually get the Visa or American Express cards for my sisters and there is a surcharge of like $5.00 to activate the card.

I think that that is terrible. These gift debit cards that you can get at the Simon counters in the mall also charge $2.50 for the Visa card activation.

But the nice thing about these cards is that they could be used virtually anywhere and you don’t have to worry about giving a bad gift.

The only problem is that the gift card is not really memorable because it is usually spent so fast and a year later you probably can’t even remember what you spent the gift card on.

By BrickBack — On Oct 18, 2010

Sinefey-I always go over with gift cards. I love getting restaurant gift cards. It is such a treat to go out to dinner with these free gift cards.

I know that there are some gift card programs that charge the buyer a fee for activating and then if the recipient of the card does not use the card within a certain time frame then the recipient would be charged.

I think that is terrible. I also know that some business gift cards expire after a certain amount of time. The best thing to do is to use the free gift card when you first get it so that you do not run into any problems.

By sinefey — On Dec 23, 2009

Most of them you have to register the card online to make a purchase online. And then if you go 1 penny over the cards limit they reject the whole purchase. Since online retailers will only let you use 1 "credit card" at a time (not including their gift cards), you can't put the amount you went over onto your own card. I love getting gift cards but you have to put some effort into getting the max amount out of them without going over. I've spent a few hours, but I did get all but 10cents of the cards balance!!

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