Have you ever spent hours wandering from store to store, looking for a gift for someone that would be useful? Consider an option that’s been around for quite a while, but is still relatively unknown – a prepaid gift card.

Carrying features of both the gift voucher and a debit card, a prepaid gift card is worth a fixed sum of money and can be swiped at any store. The value of – or the amount loaded on – the card is entirely up to you.

For instance, if you’re looking to spend $100, you can buy a gift card worth that amount. The person you gift it to will be able to make purchases up to $100.

Features

A gift card is unique in terms of the flexibility it gives to the receiver in relation to what they can shop for, and where they can shop. It looks much like a debit or credit card, with a magnetic strip and signature panel on the back, which must be signed by the person who is to use it.

Additional safety for online card transactions

A gift card can be used multiple times, at different establishments, for varying amounts until the amount loaded on the card is exhausted. Any establishment that accepts a debit or credit card will accept gift cards as well. The card can even be used for online purchases.

But keep in mind that a gift card may be used for purchases only. Cash cannot be withdrawn from the card; inserting it into an ATM will show you only the balance on the card.

Some types of prepaid gift cards cannot be topped up either.

Prepaid Gift Cards are also known as prepaid visa cards. These cards come with an expiry date, which can range from a year to five depending on the issuing bank. If there is any amount left on the card at the time of expiry, the bank usually returns that amount after deducting bank charges.

Banks impose a time period after the date of expiry within which the card must be returned in order to collect the outstanding balance. If the amount on the card has been exhausted before expiry, simply return the card to the bank.

It may be a tedious task to keep track of the amount already spent and the balance remaining on the card. Therefore, each card comes with a net banking user name and password, as well as an ATM pin. The balance may be checked either through the issuing bank’s net banking services or its ATMs.

Purchasing a card

Not all banks offer prepaid gift cards; there are only a handful that do. Purchasing a card is a fairly simple process done over the counter.

To begin with, you are not required to hold an account in the bank in order to purchase a gift card, given that card is paid for before issue of the card. But you do need to carry copies of proof of identification and address as well as photographs. Of course, if you hold an account in the bank, these proofs aren’t necessary.

You also need to carry the amount you intend to load onto the card, either in cash or via a cheque.

If you are an account holder in the bank, the amount will most likely be transferred directly out of your account, dismissing the need for cash or cheque.

Purchase of the card simply requires the filling out a form and handing over the money. You will receive the card immediately, but activation of the card will take at least a day. In case the payment is made through a cheque, the cheque must be realised before the card is activated.

Some hassles

Though the procedure for purchase is simple and, theoretically, requires an hour at most, you can run into unforeseen trouble. So don’t try to get a gift card at the last minute.

For one, the cards are meant to be available at all branches, but this is not always the case. Smaller branches may not stock cards at all times and may direct you to a bigger branch. Two, your cheque may take a couple to days to be processed and the card will be activated only after that.

If the gift card has been presented to the benefactor and if that person uses it immediately, the transaction will be declined.