I'm considering sending gift cards as presents to my friends and family. There are so many to choose from. Are all gift cards alike? If not, what are the major differences?
A gift card is a type of prepaid or stored value card that is designed to be purchased by one consumer (purchaser) and presented as a gift to a second consumer (recipient). The terms and conditions of gift card products can vary.
The two main categories are retail gift cards and bank issued gift cards.
- A retail gift card is typically offered by a major retail, entertainment or food-service company to be used at establishments owned and operated by that company.
- A bank issued gift card is typically issued by a bank, and carries the logo of a payment card network such as VISA, MasterCard, or American Express. These cards can be used at establishments and businesses that accept cards that access those networks.
For gift cards sold on or after August 22, 2010, new rules apply that will restrict many fees and require that all fees be disclosed on the gift card or with its packaging. If the gift card has an expiration date, the date must be at least five years after the gift card was issued.