On the planet today, almost every retailer issues gift cards to their customers as a means to shop from them or gift friends. Gift cards may be the unique, perfect, and risks aversive plastic cards you may think of, but just like the popular saying goes “everything that has an advantage, has a disadvantage”. Gift cards may possess so many advantages over other methods of transaction or gifting but they are not necessarily perfect or unique, because gift cards are plagued with some limitations.
However, there are two main types of gift cards; physical cards and digital cards(e-gift cards) with different characteristics and modes of usage.
Physical Cards VS Digital Cards
Physical cards, just like the name implies, are plastic gift cards issued by merchants to enable their customers to buy from their stores or gift other people the power to do the same.
Digital cards are digital, that is to say, they don’t have a physical form, rather a unique gift code is assigned to the owner which can be redeemed via online shopping at online retail stores. Companies like Amazon, Walmart, and Google issue both physical and digital gift cards to their customers.
One unique thing to note is that plastic gift cards can be used for both physical and online retail stores, while digital cards are mainly used for online retail stores.
Pros Of Gift Cards
Gift cards can extend several benefits, like;
- They can be a decent alternative form of payment when one is not convenient to use cash or prepaid debit card.
- Gift cards present a good way of gifting for the holidays or special events and present the giver an opportunity to let the recipient buy gifts of their choice or sell the gift cards for cash, without deciding for them.
- You can use gift cards to control spending and avoid unnecessary bank charges.
- Gift cards can be simple and convenient to use.
- Gift cards are very safe to use, as they can be frozen in situations of theft or loss, without losing the money in the card.
Cons Of Gift Cards
Gift cards can as well have some limitations which are;
- Misplacing a gift card or losing it to theft presents a huge problem, especially if it has not been registered or you failed to keep the gift card number. There’s a high possibility of losing the entire on the card.
- You could be charged an extra fee known as the ” inactivity fee” if you fail to use your card(this is done after 12 consecutive months)
- There’s a high possibility of forgetting little fractions of money left on the card after making a purchase, this money is wasted.
- Closed looped gift cards pose a limitation to purchasing power since it’s not acceptable in every retail store.
- There could be extra fees for reloading reloadable gift cards.
In essence, while the idea of gift cards may sound just perfect, one should weigh the pros and cons related to the use of gift cards, in order to make the best choice.