Gift cards have become an extremely popular gifting option in recent years, with growing availability across various brands, platforms, and retailers. However, with so many options now available it can be difficult to understand the different types.
In this comprehensive guide, we’ll examine the main categories of gift cards, explore examples of popular open-loop and closed-loop cards, and outline the different forms they come in. Frequently asked questions will also be addressed. By the end, you’ll have a solid understanding of the gift card landscape and what types suit various gifting needs.
Let’s start by defining the two main categories – open-loop and closed-loop cards.
Open-Loop vs Closed-Loop Gift Cards
There are two primary classifications for gift cards – open-loop and closed-loop. The main distinction is where funds can be redeemed:
Open-Loop Cards
Open-loop cards are provided by major financial institutions like Visa, Mastercard, and American Express and can be used virtually anywhere that accepts the affiliated brand. As the name suggests, redemption is “open” to a wide range of merchants rather than locked to a single brand.
These function similarly to debit/credit cards, allowing large preload amounts up to millions. Popular open-loop cards include Visa Gift Card, Mastercard Gift Card and American Express Gift Card.
Closed-Loop Cards
Closed-loop cards are tied specifically to one retailer such as Amazon, Apple, Steam or PlayStation. Funds only redeemed for purchases from that particular brand. Redemption is effectively “closed” to just that store.
Usually featuring the merchant’s logo design, closed-loop cards provide a targeted gifting solution but are only usable at that retailer’s physical and online stores. Popular examples include Amazon Gift Card, iTunes Gift Card and PlayStation Gift Card.
Understanding these core classifications helps identify suitable card options for various gifting needs based on intended redemption locations. Let’s explore some top examples in more detail.
Popular Open-Loop Card Examples
As the most flexible type, open-loop cards see widespread use for general spending across different stores:
- Visa Gift Card: Accepted at 70 million+ locations globally, making it the most universally recognized open-loop brand. Available in $25-$500 increments.
- Mastercard Gift Card: Also incredibly common with acceptance at millions of stores and ATMs worldwide. Ranges from $25-$1000 typically.
- American Express Gift Card: While perhaps not as ubiquitous as Visa/Mastercard, Amex cards work at millions of locations and are a reputable alternative. Ranges from $25-$500 usually.
- Verve Gift Card: A major Nigerian contactless payment network, Verve cards function similarly to open-loop counterparts abroad. Accepted at thousands of merchants across Nigeria.
By featuring recognizable globally-trusted payment logos, open-loop cards allow spending flexibility without geographic spending limitations.
Popular Closed-Loop Card Examples
Now let’s explore some examples of widely used closed-loop cards tied to specific retailers:
- Amazon Gift Card: The most prominently sold closed-loop card. Funds only spend on Amazon products/services but selection there is immense. From $25-$1000 typically.
- iTunes/App Store Gift Card: Grants credits to spend on digital content through Apple’s various stores like music, movies, apps and subscriptions. Usually $15-$200 denominations.
- Steam Gift Card: Perfect for gamers, this provides credits exclusively on Valve’s Steam gaming platform and digital storefront. Ranges from $5-$100 generally.
- PlayStation Gift Card: For Sony console owners, funds load as wallet credit on PSN for games, add-ons, movies etc. Usually $10-$100 in values.
- Google Play Gift Card: Works similarly to iTunes card but credits the Google Play Store ecosystem instead of Apple’s. Offers $15-$100 typically.
By allowing targeted spend at specific merchants, closed-loop cards make for practical gifts aligned to recipients’ interests.
The Different Forms of Gift Cards
Beyond categorization, gift cards also come in various physical and digital forms:
1. Physical Gift Cards
The traditional plastic gift card format still widely used. Features the brand logo/design and security codes on the back. Obtained instantly by visiting stores or sent to recipients later.
2. Digital/Mobile Gift Cards
Delivered via email/SMS with codes that fund virtual cards linked to mobile wallets. Convenient for last-minute gifting without physical cards in hand.
3. Virtual Gift Cards
Digital-only cards added to online brand accounts using redemption codes. Perfect for digital items since no physical card exists. Codes often emailed to recipients.
4. Repackaged Gift Cards
Some resellers bundle physical cards with decorative wrappings/boxes for occasions. Gives gifts a more polished appearance over basic cards.
Now that the different categories, examples and forms are outlined, let’s explore other common questions.
Frequently Asked Questions
Can I reload existing gift cards?
No, cards cannot be directly reloaded – only option is purchasing entirely new higher balance cards when funds run low.
Do gift card balances expire?
While funds never truly expire, physical cards may deactivate after 2-5 years of non-use to prevent fraud. Regularly check balances!
Are there redemption fees?
Major retailer cards like Amazon, Steam generally have no redemption fees when using balances. Lesser known closed-loop cards occasionally assess small fees.
What can balances be redeemed for?
All digital content, subscriptions, and most tangible items are sold directly by the brand. Exceptions include taxes, shipping, or extended warranties.
Maintaining proper awareness around expiration policies, spending limitations, and more helps maximize value for both gift givers and recipients. Now let’s explore converting unused balances.
Converting Unused Balances
Thankfully, reputable gift card exchange marketplaces allow safely selling remaining funds for cash at fair prices. Platforms like Nosh purchase cards directly from individuals:
- Create an account and select “Sell Gift Card”
- Choose the brand and enter the balance amount/code
- Provide verification of details
- Immediate bank transfer payment issued upon approval
This ensures a practical solution when full redemption is no longer possible. It also maximizes returns by transacting with trusted intermediaries rather than riskier traders.
Conclusion
In summary, this guide has explored the core types of gift cards, popular brand examples, common forms and frequently asked questions. Actively monitoring balances and having outlets to safely realize unused value promote fully capturing intended benefits. Understanding classifications guides selecting optimal cards aligned with recipients’ interests and spending preferences. Overall, gift cards remain a versatile gifting solution when equipped with proper knowledge of the different options.