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Types of Gift Cards in 2024
By Oluchukwu Ikemefuna
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Today, a wide variety of gift cards, like the Steam Gift Card, are available, categorized by brand. The popularity of gift cards has surged in recent times, prompting every brand to dive into the digital asset market.
Introduction
Gift cards serve as a convenient payment method for making purchases at various establishments, like restaurants, gas stations, and retail stores. You simply load money onto the gift card, which can then be used by either you or the recipient at places that accept it.
However, gift cards are typically categorized into two main types: open-loop and closed-loop gift cards. Now, let’s delve into everything you need to know about each type.
The Different Categories of Gift Cards
Understanding Open-Loop Gift Card
In the realm of gift cards, the term “open-loop” stands in contrast to the more common “closed-loop” cards offered by stores like Apple, Walmart, and Google Play. Open-loop cards are issued by financial institutions and credit card companies such as MasterCard, American Express, VISA, and Verve.
Versatility Beyond Specific Retailers
Unlike closed-loop cards, which are tied to specific retailers, open-loop gift cards do not limit users to particular stores. Instead, they bear logos such as Visa, Discover, Mastercard, or American Express, indicating their issuance by major financial institutions.
Flexible Usage and Value Storage
With their widespread acceptance at most businesses, open-loop cards offer flexibility in usage. Available in preset denominations like $25, $50, or $100, these cards are commonly used by customers to manage various monthly expenses, especially by those without bank accounts. Moreover, open-loop cards have the advantage of storing higher values compared to closed-loop counterparts, making them a preferred choice for individuals with diverse financial needs.
Understanding Closed-Loop Gift Cards
Exclusive to Specific Retailers
Closed-loop gift cards represent electronic payment methods restricted to use at a single designated retail store. Often perceived as store-specific gift cards, these cards are commonly associated with one particular retailer.
Single Purpose and Limited Usage
Referred to as “single-purpose cards,” closed-loop cards can only be utilized within the confines of the store they are issued for. This limitation defines their usage scope and distinguishes them from open-loop alternatives.
Examples of Closed-Loop Cards
Common examples of closed-loop cards include gift certificates for online platforms like Amazon, Apple, Steam, Nike, and local stores. To enhance convenience, some retailers offer mobile gift cards, which customers can access and utilize through phone apps. Retailers typically deliver these mobile gift cards to users via email or SMS, enabling users to streamline their shopping experience by carrying only their mobile device.
Exploring the Various Types of Gift Cards
1. Virtual Gift Cards
Distributing virtual gift cards via email offers recipients convenience and security benefits. They eliminate the risk of loss and save customers time by avoiding the need to visit a physical store for purchases. Additionally, acquiring virtual gift cards is swift, making them ideal for last-minute gifting occasions.
Some businesses also offer digital gift cards redeemable on mobile devices, essentially functioning as a form of money transfer rather than a physical gift card transaction. These versatile cards are popular for various occasions, including birthdays, holidays, weddings, and employee incentives.
The demand for gift cards from retailers like Walmart, Apple, eBay, Amazon, iTunes, and Macy’s has increased over time, especially with the growing trend of cross-border purchasing.
2. Physical Gift Cards
Physical gift cards, such as those available at Nosh, are tangible cards made of plastic. Resembling credit or debit cards, they feature a rectangular shape and are imprinted with card numbers or unique codes for validation purposes. Unlike personalized gift certificates, physical gift cards are not personalized with the recipient’s name.
They serve as secure payment methods, helping to prevent fraudulent transactions. Amazon physical gift cards are a notable example of physical gift cards. Nosh provides a reliable platform for purchasing and selling gift cards, offering some of the most affordable options in Nigeria.
Top Gift Cards in Nigeria
- Steam Gift Card
- Walmart Visa Gift Card
- Razer Gold Gift Card
- Visa Gift Card
- Foot Locker Gift Card
- iTunes Gift Card
- Google Play Gift Card
- American Express Gift Card
- Nike Gift Card
- Sephora Gift Card
- Nordstrom Gift Card
- Macy’s Gift Card
- Amazon Gift Card
- eBay Gift Card
- Vanilla Gift Card
These popular gift cards cater to diverse interests and preferences, offering recipients a wide range of options for their purchases.
Understanding the Utility of Gift Cards
Gift cards serve a multitude of purposes across various sectors:
- Convenient Purchases: Closed-loop gift cards enable users to make convenient purchases at petrol stations, retail stores, restaurants, and other establishments where the gift card provider operates or has authorized their use.
- Popular Gift Types: Gift cards for groceries, shopping malls, gas stations, and more are among the most sought-after gift card options due to their versatility.
- Business Promotion: Businesses commonly use gift cards to promote their products or services. They often distribute them as appreciation tokens to customers, contributing to increased direct sales and brand visibility.
- Customer Recognition: Gift cards provide an excellent way to acknowledge and reward loyal customers. They can also serve as a means to introduce a new brand to an established market.
- Cost-Effective Rewards Programs: Wholesale gift cards enable businesses to create budget-friendly rewards programs that offer long-term value to customers, enhancing customer retention and satisfaction.
Functions of Gift Cards
- Acquiring New Customers
Gift cards like the Apple gift card and the American Express gift card serve as enticing offers for potential customers, especially those accustomed to using credit cards for desired goods or services. By attracting customers from competitors, gift cards can stimulate interest in your products or services, potentially leading to future purchases and customer loyalty. - Enhancing Brand Awareness
Gift cards often feature the company’s logo and branding, serving as effective promotional tools. As recipients carry and use these gift cards, they contribute to spreading awareness of your brand among new audiences, further solidifying your market presence. - Driving Sales Growth
While gift cards typically come with preloaded values, many recipients end up spending more than the card’s initial amount. The allure of browsing products and the desire to utilize the full value of the gift card often result in increased sales. Even if customers can only partially cover the cost of their purchases with the gift card, they are likely to remain satisfied and continue supporting your business. - Mitigating Fraud Risks
Utilizing digital gift cards reduces the risk of fraud by allowing for partial redemption, which leaves a remaining balance on the card. Additionally, businesses can use gift cards to issue store credit, reducing instances of fraud where customers attempt to exchange expired refunds for cash. By incentivizing purchases with gift cards rather than cash, businesses can minimize fraud-related losses while encouraging sales.
Gift Cards FAQs
- How do open-loop and closed-loop gift cards differ, and which one should I choose?
- Financial institutions provide open-loop gift cards, which users can use at various retailers, while closed-loop cards tie to one specific retailer. The choice depends on your preference for versatility versus exclusivity.
- What benefits do virtual gift cards offer compared to physical ones?
- Virtual gift cards offer convenience, security, and quick delivery via email. They also eliminate the risk of loss and save time compared to physical cards.
- Which popular gift cards do people commonly use in Nigeria?
- Popular gift cards in Nigeria include Steam, Walmart Visa, Razer Gold, Visa, Foot Locker, iTunes, Google Play, American Express, Nike, Sephora, Nordstrom, Macy’s, Amazon, eBay, and Vanilla.
- How can businesses benefit from offering gift cards to their customers?
- Businesses can attract new clients, boost brand recognition, drive sales growth, and mitigate fraud risks by offering gift cards.
- What role do gift cards play in acquiring new clients for businesses?
- Gift cards entice customers from competitors, introducing them to a business’s products or services and potentially leading to future purchases.
- How do gift cards help boost brand recognition and awareness?
- As recipients and gifters use gift cards, they spread awareness by featuring the company’s logo and branding.
- Can gift cards lead to increased sales for businesses, and if so, how?
- Yes, gift cards often result in increased sales as recipients may spend more than the card’s initial value, driven by the desire to utilize the full amount.
- What measures can businesses take to mitigate the fraud risks associated with gift cards?
- Businesses can utilize digital gift cards, offer partial redemption, and issue store credit to reduce fraud risks associated with gift cards.
Conclusion
When it comes to purchasing or selling various types of gift cards, like a Steam card, an American Express gift card, or an Apple gift card in Nigeria, Nosh stands out as the ultimate platform. Offering a plethora of popular gift cards on its exchange platform, Nosh provides a seamless experience for buyers and sellers alike.
For those looking to convert their gift cards into cash swiftly and securely, Nosh is the top recommendation. With Nosh, trading gift cards is a breeze, ensuring a quick and hassle-free process for all parties involved. Whether you’re buying or selling, Nosh is the go-to destination for instant cash transactions with gift cards.
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