All About Gift Cards

Retail Gift Cards

Retail gift cards are issued by specific retailers and can only be used at their stores or websites. These cards are often available in both physical and digital formats and are designed for use with a specific brand or company.

Key characteristics of retail gift cards include:

• Can only be used at the issuing retailer or its affiliates
• Often have no purchase fees
• Many have no expiration dates (depending on local laws)
• May offer special promotions or discounts
• Some retailers offer reloadable options
• Balance can typically be checked online, by phone, or in-store

Popular examples include cards from Amazon, Walmart, Target, Best Buy, Starbucks, and many other retailers.

Bank-Issued/Network Gift Cards

Bank-issued gift cards (also called open-loop or network gift cards) are provided by financial institutions and operate on major payment networks such as Visa, Mastercard, American Express, or Discover. These cards can be used anywhere the payment network is accepted.

Key characteristics include:

• Can be used at most locations that accept the payment network
• Usually have purchase fees ($3-7 typically)
• May have inactivity fees after a certain period
• Required by U.S. law to be valid for at least 5 years
• Typically require activation
• May require registration for online use

These cards offer maximum flexibility but come with additional fees compared to retail gift cards.

Digital/E-Gift Cards

Digital gift cards (also called e-gift cards) are electronic versions of gift cards delivered via email, text message, or mobile app. They contain a code or barcode that can be used for online or in-store purchases.

Key characteristics include:

• Instant delivery - perfect for last-minute gifts
• No physical card - code is delivered electronically
• Can be used online or in-store (varies by retailer)
• Often can be added to mobile wallets
• May be printable for in-store use
• Same terms and conditions as physical cards from the same retailer

Digital gift cards have grown significantly in popularity due to their convenience and immediate delivery.

Reloadable Gift Cards

Reloadable gift cards allow additional funds to be added after the initial purchase. These cards combine features of traditional gift cards with prepaid debit cards.

Key characteristics include:

• Can be refilled with additional funds
• May require registration of personal information
• Often used for budgeting or allowances
• Some may have monthly maintenance fees
• May offer features like direct deposit
• Can be retail-specific or bank-issued network cards

Popular reloadable cards include Starbucks Rewards Card, Amazon Gift Card balance, and various prepaid cards.

Experience and Specialty Gift Cards

Experience gift cards focus on providing services or experiences rather than physical products. Specialty gift cards cater to specific purposes or demographics.

Examples include:

• Travel gift cards (hotels, airlines, experiences)
• Spa and wellness services
• Adventure experiences (skydiving, tours, etc.)
• Multi-store gift cards for specific locations (malls, shopping centers)
• Dining cards for restaurant groups
• Subscription service gift cards (streaming, gaming, etc.)

These cards often focus on creating memorable experiences rather than facilitating product purchases.

Gift Card Security Features

Modern gift cards include various security features to protect against fraud and unauthorized use:

• PIN Protection: Many cards have PINs or security codes required for redemption
• Scratch-off Panels: Cover security codes to prevent them from being viewed before purchase
• Tamper-evident Packaging: Shows if a card's packaging has been opened or tampered with
• Card Activation: Cards that require activation at checkout before they work
• Registration Systems: Some cards allow registration to protect against loss or theft
• CVV/Security Codes: Bank-issued cards often have security codes for online purchases
• Encryption: Digital gift cards typically use encryption to protect the card data
• Balance Protection: Some retailers offer balance protection for registered cards

These security features vary by card type and issuer, with bank-issued cards generally having more security features than retail gift cards.

Common Gift Card Scams

Be aware of these common gift card scams and fraud tactics:

• Tampered Cards: Scammers record card numbers in stores and wait for them to be activated
• Payment Scams: Fraudsters impersonating officials demanding gift cards as payment
• Email Phishing: Fake emails claiming to offer free gift cards to steal information
• Verification Scams: Calls asking you to "verify" a gift card by providing the numbers
• Reselling Scams: Selling already used or fake gift cards on marketplaces
• Social Media Scams: Fake giveaways requesting fees or personal information
• Altered Physical Cards: Cards that have been physically tampered with or altered

Remember: Legitimate organizations will never require payment via gift cards. Gift card information should be treated as securely as credit card numbers.

Gift Card Safety Best Practices

Follow these recommendations to use gift cards safely:

• Buy from Official Sources: Purchase directly from retailers or authorized sellers
• Inspect Cards: Check for tampering before purchase (exposed PINs, damaged packaging)
• Keep Receipts: Save purchase receipts until the card is fully used
• Register When Possible: Take advantage of registration options if available
• Check Balances Regularly: Monitor your gift card balances, especially for unused cards
• Use Promptly: Redeem gift cards soon after receiving them
• Protect Card Information: Treat gift card numbers and PINs as sensitive information
• Verify Websites: Only enter gift card information on legitimate, secure websites
• Be Wary of Resellers: Research reputation and guarantees before buying from resale sites

Taking these precautions can significantly reduce your risk of gift card fraud or loss.

Checking Gift Card Balances

Most retailers provide multiple methods to check gift card balances:

• Online: Visit the retailer's website and look for a "Gift Card Balance" or "Check Balance" section
• Mobile Apps: Many retailers offer balance checking through their mobile apps
• Phone: Call the customer service number typically printed on the back of the card
• In-Store: Visit a physical location and ask a cashier or customer service representative
• Receipts: Many retailers print remaining balances on receipts after partial use

To check balances, you'll typically need the gift card number and PIN/security code. For bank-issued cards, check the website listed on the back of the card.

Redeeming Gift Cards

Redemption procedures vary by card type and retailer:

• In-Store Redemption:
  • Physical cards: Present the card at checkout
  • Digital cards: Show the barcode/code on your phone or present a printed version
  • Some stores may require ID for high-value cards
• Online Redemption:
  • Enter the gift card number and PIN during checkout
  • Some retailers allow adding gift cards to your account balance
  • Bank-issued cards work like credit cards for online purchases
• Mobile App Redemption:
  • Add gift cards to retailer apps or digital wallets
  • Scan barcodes or use tap-to-pay features at checkout

Many retailers allow combining gift cards with other payment methods if the purchase amount exceeds the card balance.

Maximizing Gift Card Value

Strategies to get the most value from your gift cards:

• Timing Purchases: Use gift cards during sales or promotional periods
• Combine with Coupons: Many retailers allow using coupons with gift cards
• Loyalty Programs: Earn rewards points when using gift cards at many retailers
• Track Sales Cycles: Wait for sales on items you want to purchase with your gift card
• Avoid Partial Balances: Try to use the full card amount to prevent forgotten small balances
• Card Consolidation: Some retailers allow combining multiple gift card balances
• Set Reminders: For cards with expiration dates or inactivity fees

By using these strategies, you can maximize the purchasing power of your gift cards and avoid wasting card value.