Were your holiday stockings and packages filled with gift cards and prepaid cards? Then you are in good company. In 2019, 80 percent of consumers reported receiving a gift card during the holidays, while the prepaid card market totaled more than $500 billion.
What’s behind this revolution in gift-giving? Lets take a closer look at these two types of cards and what makes them so popular.
Difference Between Gift Cards and Prepaid Cards
The terms “gift card” and “prepaid card” are often used interchangeably. While the distinction has blurred slightly over time, they are two different instruments.
- You can only redeem gift cards at the specific retailer listed on the card. Gift cards can’t be reloaded. Once the balance on the gift card is used, the card becomes useless.
- American Express, Visa and other credit card companies are responsible for issuing prepaid cards. These instruments function much like debit cards. You can use the preloaded balance at a wide range of retailers or even withdraw cash at an ATM. Recipients of prepaid cards may keep them active by continuing to add funds.
Benefits of “Virtual” Gifts
- Gift cards and prepaid cards eliminate the stress of coming up with the perfect gift by allowing the recipient to select just what they want. Additionally, this removes the hassle of returning any unwanted gifts.
- Pandemic-related changes are accelerating growth of an already booming e-commerce market. Gift cards and prepaid cards offer the convenience of use in both digital and brick-and-mortar storefronts.
- Banks and Financial institutions issue prepaid cards. Because of this, they come with valuable protections against loss. However, the same hasn’t been the case for gift cards until recently. An increasing number of vendors are allowing gift cards to be registered. This offers a certain amount of protection that has not previously been available for gift cards.
Prepaid2Cash to the Rescue
Prepaid2Cash accepts both types of cards, allowing customers to convert their gift cards to funds deposited directly into your bank account. Visit the App Store or Google Play and download Prepaid2Cash today.