Article Title: Gift Cards 101; How To Buy, Sell and Redeem Different Types of Gift Cards
Once upon a time, thinking of the perfect gift to buy for your loved ones required a minimum of 3 days under an Oak tree, meditating on what to buy. If by some chance, you experience enlightenment and figure out what to buy, there’ll always be that voice at the back of your head, asking if you got the right gift.
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In this century, you don’t have to become a monk to purchase that perfect gift. Now we have gift cards to make that happen. It doesn’t matter if it’s her birthday, his graduation or their wedding anniversary, gift card is always the smart choice. You get to personalize the gift, without taking away the choice of picking whatever the recipient wants. Therefore, we explore the types of gift cards you can redeem, how to buy, and sell them. This is Gift Card 101, let’s start with the basics.
The Different Types of Gift Cards
Before we proceed any further, you should understand the basic types of gift card you can get. However the most popular ones are iTunes gift cards, amazon gift cards e.t.c. You have between two options of
- Cash cards
- Store cards
Let’s discuss this further; shall we?
1. Cash Cards
The major thing you should understand by cash cards is that they can be used anywhere credit card is accepted. This is because they are usually sponsored by companies like Visa, MasterCard, Discover and American Express. The major advantage of using this type of gift card is that you can use it for practically anything you can use cash for. Yes, even paying your bills.
However, there is a downside to giving this type of gift card. It’s an equivalent of giving out cash, it doesn’t send the message “I know you”. Cash cards as a gift are too impersonal and I don’t think it’s a great gift to give a close friend.
2. Store Cards
If Cash card are too impersonal, how about store card? Here is the thing, store cards are specific to a retailer. This means a Banana Republic store card can only be used in a Banana Republic store and a Victoria’s secret store card is only useful their store.
The major advantage of using store cards is that, you get to personalize your gifts. Her birthday, his graduation or their anniversary, the message is the same; “I know you, I care about you”.
The downside of gifting a store card is pretty obvious, don’t you think? You are restricted to a particular store and with it, its internal policies. You have to be extra conscious of the expiry dates, it’s probably the most frustrating thing about using this type of gift card. While some cards are valid for 90 days, there are others that are valid for just 30. In fact, most store card have a demurrage policy in which your card loses value every month. This means that your $200 worth of gift card can have a value of $50 at the end of six months.
There is another question lingering in your mind, you are wondering why sellers offer gift card. I’m going to dedicate a whole sub-heading to that. Let’s go.
Why do sellers offer gift cards?
Regardless of how large or small a store might be, they love gift cards. From the toy store to the lingerie store, offering of gift card is a fundamental thing. To answer the question of why stores love gift cards, the answer is simple; profit.
Look at it this way, when a store sells a gift card, they have generated upfront revenue for themselves. Now, if you (the customer) lose or forget to redeem the card, it’s your loss. The store has nothing to lose anymore. There are three options available here to you, either of which is favorable to the store.
- Use the full value.
- Leave the cash on the table.
- Purchase more goods.
Regardless of which of the options above you opt for, there is a high probability that you’ll be a repeat customer. Therefore, it is always a win-win for the store.
There are other players in the gift card games that are smiling every time you use a gift card. These are the banks and the credit card companies. These guys contribute to logistics and promotions in order to get you to buy more gift card. They do this because they receive a small cut in form of “merchant fee” every time you redeem your gift card.
Why We Still Love Gift Cards In Nigeria.
Yes, the retailers are making so much money off us, and so are the banks. We know this, we understand it. The question is, why should we still love gift cards? Answer; we always win.
You should see gift card as a game. Like every game, there are winners and losers. We love gift cards because we have learned to win the game. Follow the tips to be a winner also.
Tips to Help You Win the Gift Card Game.
There are three important things to consider if you want to be a winner in the gift card game. The first thing is:
In this instance, you might want to consider a cash card. They have the advantage of being accepted anywhere major credit cards are accepted. Store cards can be quite limiting. Exchanging the card for cash is not even accepted by some retailers.
Based on this particular criterion, store card has an advantage over cash card. This is because, there are fees associated with the use of cash card. Not only do you have to worry about charge incurred per transaction, there is also a maintenance fee of $2.50 to $5 every month. This reduces the value of your cash card pretty fast. My advice, use your card as soon as possible.
Store card generate no additional charges.
This is the final thing you should consider when deciding which card to get. You should know that store card trumps cash card based on this criterion as well. Cash cards usually come with an expiration date of 5 years. I know it sounds like a long time, it really is not. Between the maintenance fee and your short memory, you can easily lose hundred of dollars.
Store gift cards have no expiration date. There is only one thing you have to fear here, the store going out of business.
How to Choose the Right Gift Card To Buy?
I have been writing this article for a while, and you have been reading. If you were paying half an attention, you already know how to choose the right gift card. However, for the sake of diligence, I’ll give you a couple of pointers.
Before buying gift card for your family or friend, take time to consider the person’s interests and hobbies. Pick a store card appropriate with the person’s interest. If he or she is picky about gift, don’t bother buying a store card. A cash card, accompanied with a thoughtful note should do the trick.
However, if you happen to be a recipient of an unwanted gift card, there are four things you can do with it. They are;
- Donating to charity
Buying of gift for your loved ones got a lot easier with gift card. Rather than spending hours thinking of what to buy, your cognitive process can be directed towards what type of gift card to buy. This is important so your gift card won’t go unused. Also, let the person you are giving to know the time limit on the card.
The same thing applies to you if you are a recipient. Check the expiration date and pay extra attention to the maintenance charges. Most importantly, use the gift card on time, don’t let good money go to waste.
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