Gifting your loved ones is an essential and special part of Indian culture. However, it often leaves many of us hassled as we are unable to come up with appropriate gifting ideas. For all those who face a tough time in choosing gifts, a prepaid gift card is an excellent option. Read on to understand more about prepaid gift cards
What is a pre-paid gift card?
The prepaid gift card is a smart gifting solution, which essentially works like a gift voucher. A pre-paid gift card is a magnetic strip based prepaid card which looks similar to a credit card or debit card. However, a prepaid gift card is neither a credit card nor a debit card. It is not a credit card as it does not allow user to accumulate debt on the card. It is also not a debit card as the amount spent is not linked to the bank account.
You can purchase prepaid gift cards from banks by paying the value of the prepaid card along with any joining fees, if applicable. Once bank receives funds, the card is activated and the amount gets credited into it. One can gift this activated prepaid gift card to anyone, and the recipient will be able to use it across merchant outlets which accept that particular type of card (Visa, Mastercard or American Express, as the case may be). Every time the gift card is used, the purchase amount is deducted from the card balance. The recipient can use the card till the entire amount is used.
Pre-paid gift card features
Prepaid cards are issued by most leading banks in association with Visa, Mastercard or American Express. Some online portals also sell prepaid gift cards.
A pre-paid gift card is issued in a particular currency. Most cards issued by Indian banks are issued in Indian currency.
Some prepaid gift cards come with a PIN, which can be used to check card?s balance and transaction history, making it easy to track
The gift card is meant for electronic use and can be used only at merchant establishments which have the terminal which accepts such prepaid gift cards
Prepaid gift cards are available in various denominations of R500, R1,000, R2,000 and R5,000. Some banks also issue in multiples of R1
Pre-paid gift cards can either be recharged/reloaded or are non re-loadable. Majority of the banks issue cards which cannot be reloaded
The balance on the prepaid gift card can be checked anytime by the user, either by contacting the bank or at the bank ATMs.
Funds in the prepaid gift card are non-transferable to any other card. Cash withdrawal on such cards is generally not permissible.
Pre-paid gift cards have a validity period. Most banks issue it with a validity of 1 year.
Fee and charges
A nominal fee of R50-100 and service tax are charged as the joining fee when you purchase the pre-paid gift card. In the case of loss of card, a similar amount is charged for a card replacement. Some banks levy similar amounts towards other charges like requiring physical statements, regeneration of the PIN, cancellation etc.
Documentation required
Most banks do not require the purchaser of the gift card to be their customer. If the purchaser is not a customer of the bank, then a full KYC is carried out. The purchaser needs to provide a proof of identity card and a residence proof along with the completed gift card application form. On the other hand, if the purchaser is a customer of the bank, then such formalities are not required.
Benefits
The pre-paid gift card is more personal than cash and hence is a popular gifting option.
The receiver is free to decide how he wishes to spend the card amount. A wide variety of options including shopping, dining and partying is possible with the gift card.
It is more durable and easier to carry compared to any other type of gift voucher.
The pre-paid gift card offers the ultimate flexibility of usage – the user is free to decide the value and location to spend the amount according to his wish.
The user can track the usage of the card and check any upload and expenditure immediately.
Pre-paid gift cards have wide acceptability.
Pre-paid gift cards are safer compared to cash and gift certificates, as they carry a unique ID numbers.
Prepaid gift cards have become a popular gifting option in recent times in India on the back of various benefits and have carved a niche in the market.
