The working of a gift card
Generally, a gift card looks similar to a credit card or debit card. A gift card is a rectangular card made of plastic. It usually has some patterns and designs on it which suggests that it is a gift card and not a credit or debit card. A universal giftcard also has similar looks.
A gift card usually has a specific code or number which suggests that it can be used in a particular store only. However, a universal giftcard has a code that can be scanned or used in any store or shop globally.
Unlike a credit card or debit card, a gift card does not have the name of the owner on it. Due to this, anyone can use a gift card.
Gift cards have a barcode or magnetic strip on them. Such a barcode or magnetic strip is scanned when someone uses a gift card for purchasing. Most of the cards do not have any amount of money stored in them. The retailer or the giver of the gift card usually enters a specific amount of money in the gift card at the time of giving it to the buyer or customer.
The amount of money or the balance of a gift card is not stored in the gift card. Instead, it is stored somewhere in the shop or store’s database. The amount stored in the database is linked to the barcode or the magnetic strip of the gift card.
Thus, if you want to check the remaining balance of your universal giftcard, you might have to visit the store once for it. However, these days some websites and stores allow their customers to check the remaining balance of their gift cards online via phone or laptop.
Hence, gift cards are different from cards used in public transport systems and libraries. Unlike gift cards, these cards have money stored in them.
Usually, before using a gift card, the customer needs to activate it. The activation process was introduced in gift cards so that customers can activate their gift cards whenever they want. This way, the expiry date gets set according to the date of activation. To activate a gift card, a customer might need to call or text a specific number.
However, some gift cards do not need to be activated. Instead, they are pre-activated and can be used directly without any activation process.
Generally, there are two broad categories of gift cards. One is open-loop cards and the other is closed-loop cards. Open-loop gift cards are also known as network cards. These gift cards are issued by credit or debit card companies and banks. Thus, open loop gift cards can be redeemed in different stores and shops. A universal giftcard is an example of an open loop gift card.
On the other hand, closed-loop gift cards can only be redeemed at a specific store, shop, or restaurant. Such gift cards often have a longer working period and charge fewer fees as compared to open loop or network cards.