Gift Cards vs Prepaid Cards; What’s The Better Choice?
- Posted on April 20, 2022 by Robert
- Reading time about 4 minutes
It’s the all-new era of gifting where finding the right gifts is always tough! To ease the process it’s better to go for gift cards providing customers the freedom to buy a gift of their choice. Though gift cards have always been an interesting choice for most customers but are gift cards or prepaid cards the same concept? Let’s talk about the trending debate on gift cards vs prepaid cards and check out who wins the battle.
In the tough competition amongst tons of brands offering similar services all around, gift cards can be considered quite a dynamic option that can be used at the particular brand equivalent to cash, while talking about prepaid cards, also known as debit cards, are the best solution when you don’t want to get into the tangled option of a credit card. So, does a prepaid look too naïve as a gifting option or is it the similar concept of a gift card without a limitation of making purchases from a single brand/website? Which could be the right option? Let’s understand the basics and freeze the best option.
Understanding Gift Card, and their functionalities
It can be both in the form of a virtual card or a physical card with a certain amount of currency added, this can be spent on a single store or a chain of stores. Stat says that 76% of adults purchased at least one gift card for the holiday season. These are mostly limited and can only be used in a certain chain of stores or simply a single brand store.
The best part of having a gift card is using it as a substitute payment mode if you’re not willing to make cash payments or use your bank cards. Another aspect not to be overlooked is mostly quoted by the gift voucher management software companies, which is being a great gifting option for friends and family. It’s a smart option to avoid overspending and bank overdrafts and is widely accepted throughout.
When it’s about talking limitations, the major drawback of the gift card is that one may not purchase a product of the same amount! The amount to be spent above can be over-drafted. Also, if you have purchased a physical gift card, there’s always a chance of losing or getting it stolen. Choose wisely!
Understanding Prepaid Cards, and their functionalities
These are just like debit cards but do not require a bank account to back them up! One can own a prepaid card with a certain amount of currency added and it can be used anywhere with no brand or store restriction. Consider it a great option to gift to youngsters or kids to keep a check on their spending. This can be filled in monthly, or whenever required and the best part being some prepaid cards come with an overdraft balance.
The limitation of having a prepaid card is that it has a monthly or annual fee attached to it, some cards also charge initial setup fees, reloading fees, charges of using an ATM and this can surely be a big turn off if you’re willing to use it in the longer term.
Who’s up in the race?
With the latest crash on gift card management software in the market, we cannot say prepaid cards are left far behind! Now that we’re aware of the differences in both the gifting options, let’s quickly compare the traits of both on the terms that matter the most to the receiver.
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Coming to the Final Word
In the above article we have talked about all the aspects of gift cards and prepaid cards, decoding the basics and knowing what exactly they are, we can say it’s freedom of choice! Using gift cards or prepaid cards basically depends on your requirement. Both the mediums are great and have their pros and cons attached but, make sure you choose the one best suited to your requirement. As a business, eCommerce business owner has it in mind that gift card loyalty software is quite imperative if you’re willing to offer gift cards to your target audience. Still in splits? Contact Novus Loyalty and we’ll help you in knowing what and when to implement exactly how you need it!