What Is A Gift Card – How Gift Cards Work? There have been various questions flying around on the internet about gift cards. Well, we should definitely address the major question – How do gift cards work and what is a gift card? So, if you’ve been curious about what a gift card is, you are reading the right piece.
A gift card is a prepaid card commonly stored with a certain amount of money. Retail stores and banks are known to issue gift cards for various reasons.
Retail stores like Walmart, Amazon, and Sephora provide gift cards to make purchases easy for their customers. This in turn helps to raise awareness and boost business. It is also a great way to reward loyal customers.
Financial institutions also issue gift cards like Visa gift cards and Mastercard gift cards. Certain gift cards can only be used at the issuer’s store while some can be used at any retailer that accepts them.
These gift cards have a preset amount that can be used by holders to buy items at the issuer’s store. Items like clothing, gadgets, home equipment, media content, etc. They come in various denominations ranging from $1 to $5000.
Some gift cards have expiration dates while some do not. The only way to find out is to ensure to read the terms and conditions of any gift card you intend to buy.
Another amazing thing you should know about gift cards is that they are great gift options. When you are unsure about what gift to give your friend or family, the perfect alternative is a gift card. It also gives the recipient the flexibility to purchase whatever they like based on what the gift card can buy.
What Is Gift Card – How To Explain How Gift Cards Work?
A gift card is what you can spend just like money. You can use it to buy things at the store instead of your regular cash. Instead of buying a gift for your friend on special occasions, you can give such a person a gift card instead. Retailers commonly produce gift cards for customers to make purchases easy. You can buy a gift card online or at a physical store.
Different Types Of Gift Cards
There are different types of gift cards with individual features. Get to know them below:
- Closed-loop gift card: this type of gift card is only eligible for use at the store that issued it or in chains of stores. You can redeem them at the store’s physical location or on their online platform. Examples include a Best Buy gift card, a Macy’s gift card, and a Nike gift card.
- Open-loop gift card: this is a general-purpose gift card which means you can use it at any retail store or merchant that accepts it. It can be used to make all kinds of electronic payments. Examples include Visa, American Express, Discover, and MasterCard.
- Physical gift card: this is a regular plastic card that can be held. You can buy it in-store or online and it will be mailed to your provided house address.
- Digital gift card: this type can only be purchased virtually. This means you need to visit the issuing retailer’s website and place an order for it. It will be sent via email to you with the necessary card details.
Benefits Of Gift Cards – What You Can Use Gift Cards For
There are several benefits of gift cards you should know. They include the following:
- It is a great gift option for any special occasion.
- A gift card gives recipients the flexibility to purchase anything they want.
- It is convenient to buy and use.
- It is safe to use. In the case of digital cards, you do not need to take them around at the potential of losing them.
- It is a great payment option when you do not have cash or intend to pay with a credit card.
- The benefit of gift cards for businesses is to attract new customers and promote brand awareness.
- It is a great tool to curb unnecessary spending which is also a great way to avoid bank overdrafts.
Disadvantages Of Gift Cards
- Closed-loop gift cards limit you to buy from a certain store.
- There might be unused funds left on a gift card which may be due to forgetfulness.
- Certain gift cards have hidden fees and expiry dates.
- After a certain time (12 months) of not using the gift card, you may be charged an inactivity fee.
- If you do not have the card number saved somewhere, losing a physical card can be a headache.
- You may be charged an extra fee if you want to reload the gift card.
How Gift Cards Work?
There are 3 different ways you can redeem gift cards in Nigeria.
1. It Can Be Redeemed at the Issuing Retail Physical Store
This is the most common way to redeem a gift card. You only need to walk into the store if they have a physical location in the country. The way this works is that you pick out the items you wish to purchase, take them to the checkpoint and the total price will be deducted from the gift card balance. This payment is always facilitated by the cashier.
2. It Can Be Redeemed On The Issuer’s Online Store
It is easier to redeem gift cards on the issuer’s online store. You can conveniently do this from the comfort of your home. Gift cards you can redeem include but are not limited to Steam gift cards, iTunes gift cards, Xbox gift cards, and Amazon gift cards.
3. It Can Be Exchanged For Cash
You may be wondering what is a gift card used for in Nigeria. This is the ideal option if you are based in Nigeria. You can sell gift cards for cash conveniently. There are several trading platforms where you can convert your gift card to naira.
The best gift card trading platform in Nigeria is Hook. You get the best rates for your gift cards. Not only that, you get to enjoy a smooth and fast trading experience. Your wallet is credited immediately after a successful transaction.
How Does Scamming Gift Card Work and How To Avoid Them?
- Online auction scams
Certain online platforms put out gift cards for sale at a very ridiculous price with a high discount. Run away from any deal that looks too good to be true. Most of these gift cards are fake because you only realize they don’t work after the purchase. You should stay clear of any sketchy websites disguised as online auction sites.
- Bot scam
Software applications that function as bots are often developed by gift card scammers to fetch gift card balances online. The bot functions in a way that searches the system for activated gift cards. Once found, the gift card balance is used to make unauthorized purchases.
The best way to avoid this is to activate your gift card only when you plan to use it. This will reduce the chances of bots coming to steal your card.
- Fake cash prize
Scammers do reach out to random people via calls, email, or text. They do claim you won a certain cash prize and ask you to pay a redemption fee with your gift card before you can claim it. Another strategy they use is to ask you to buy a gift card and send the details to them.
I have personally experienced this scam before. You need to be content and be aware that there is no miracle money anywhere in order not to be a victim.
- Tech support
Scammers might reach out to you via phone call and claim to be tech support at any popular company like Google. They claim they want to help you with some technical issues but need to provide private information or card details.
Kindly note that no official tech support rep will require gift card details from you to fix any technical issues.
How To Redeem/Sell Gift Cards In Nigeria
Interested in selling gift cards in Nigeria? The first thing you need to do is sign up for an account on the Hook website or simply download the mobile app.
You will be directed to a dashboard. Navigate to Giftcards and then click on Sell Giftcards. Input all the necessary details required like the gift card name, its subcategory, and the amount. Finally, click on “Begin trade”. It’s just as simple as that.
Gift card is generally admired because of their amazing features. It exists in various gift card types like closed-loop gift cards and open-loop gift cards which can either be in physical or digital form.
Gift cards can be purchased at physical stores or online. To buy gift cards online, just visit the issuer’s online store to place an order.
They are beneficial to individuals and businesses in diverse ways. Ensure to always check gift card terms and conditions to be aware of any expiration date.
Gift card scams are rampant especially online, it’s best to avoid them. With what we’ve discussed, it’s now easy to spot and avoid them.
The best way to utilize gift cards in Nigeria is to exchange them for cash. Seamlessly trade your gift cards on the Hook platform.