Whether you’re looking to send someone a present instantaneously or just want an easy way to pay for an online purchase, you may consider virtual gift cards.
Most retailers with an online presence offer them, serving as a convenient alternative to physical gift cards. Buying a virtual gift card can save you the time and stress of travelling to a brick-and-mortar store simply to purchase a physical gift card. Plus, they enable you to send someone a gift from their favourite store even if there’s no storefront near you.
Not sure how it works? Check out our guide on virtual gift cards below.
Gift cards can come in two main forms: a physical card or paper that you can hand to your intended recipient, or a virtual card that's ordered online and sent to the recipient via an email, text, or other digital method.
Both types of cards may come with an expiration date or some associated fees, so it’s wise to read the fine print associated with the gift card before you buy or reload it with any funds. The good news? The Australian Consumer Law requires that most gift cards or vouchers purchased after 1 November 2019 be sold with a mandatory minimum expiry period of three years and that expiry dates be prominently displayed on them. Plus, once most of these gift cards have been issued, they mustn’t incur post-purchase fees like activation fees, account keeping fees, and balance enquiry fees. Please note that there are exceptions to these general rules.1
No matter what form you choose to buy, branded gift cards can either be open-loop, meaning they are accepted by a range of merchants; or closed-loop, which means they are only accepted by the specific retailer that issued the card.
It’s worthwhile considering whether a recipient shops from a merchant before gifting them a closed-loop gift card from that merchant.
Physical gift cards exist in a tangible paper, plastic, or card format and usually must be purchased in person from a brick-and-mortar store.
It’s possible to carry this type of gift card around in your wallet or purse and use it to pay for purchases when at a store or shopping online.
If shopping online, it might be necessary to type in a code or PIN which can be found on the card to redeem it.
Keep in mind that if there’s a balance left on the card after a purchase, you must keep the physical card with you to redeem the remaining funds later. If you accidentally lose the card, there might not be a way to redeem any remaining balance.
A virtual gift card is available as a digital link or code rather than something you can physically hold in your hand. You would usually purchase, send, or redeem a digital gift card online rather than at a store. Some virtual gift cards also have a code or PIN associated with them.
Potential benefits associated with virtual vouchers or gift cards are outlined below.
With virtual gift cards, it doesn’t matter where you or your intended recipient are located. For instance, if you want to buy your mother-in-law a gift card to a store she loves in her city, you may be able to buy it online and send it to her via email, even if the store doesn’t exist near where you live.
Sending gift cards through email or text is simple and practically instantaneous. You don’t have to wait a certain number of business days for your friends or family to receive your gift. You also don’t have to worry about your virtual gift card getting lost or stolen on its way to the recipient.
Although all virtual gift cards will usually have their own terms and conditions linked to them, they can often be redeemed anytime, anywhere from the comfort of the receiver’s home. And if there’s any remaining balance, it’s not usually critical to safeguard a physical card. Simply keep the email (with the virtual card) handy and reference it before your next purchase.
Having a set amount allocated on a virtual gift card could also help with budgeting. For example, a virtual gift card could be used to avoid overspending and help users stay on track to meet financial goals.
Next time you’re looking to give a gift to someone, remember that sending a virtual gift card their way is an option.
Learn about eGift Cards with PayPal here.
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