What are the pros and cons of gift cards?

Most retailers offer gift cards to customers as a way for them to give money or shop online. There are two types: physical and digital (gift cards), and each one has a variety of benefits and features. VOUCHAIN is a decentralized infrastructure that allows retailers and shopping centers to issue and manage vouchers. This provides tangible benefits and efficiency throughout the value chain.

How gift cards work
A gift card can be used as a payment method to purchase items at restaurants, gas stations, or other places. The gift card can be loaded with money that you or the recipient can use to make purchases at any of the accepted locations.

Gift cards can either be open-loop, or closed-loop. An open-loop gift certificate can be used wherever that particular brand of card is accepted. If you have a Visa logo gift card, you can use it to purchase any Visa-accepted product.

Closed-loop cards, however, are only allowed to be used at certain merchants. If you buy a gift certificate from Amazon or Starbucks, either you or the recipient can use it to make purchases at the merchant issuing the card.

Physical Gift Cards vs. digital Gift Cards
You can choose to buy gift cards either digitally or physically. Digital gift cards are not physically available. Instead, you will be assigned a unique code number that can be used to redeem your gift card at online retailers. Although physical gift cards are still the most popular, this trend is likely to change.

The pros and cons of gift cards
Gift cards offer many benefits. You can take this example:

If you don’t have a credit card or cash, they can be used as a substitute payment.
Gift cards are a great gift idea for holidays and other special occasions.
Gift cards can be used to manage spending and avoid bank overdrafts.
They are easy to use and can be very convenient.
Gift cards are a great gift option if you don’t know what to get someone for Christmas. They allow them to shop what they want, when they want, and they can be given to anyone. Keep in mind, however, that gift cards that are closed loop can be more restricted than open-loop cards.

The cons of gift cards
There are also some drawbacks to gift cards. These are five.

A gift card can be used to make purchases, but there might be some money that isn’t used. This money, regardless of whether it’s due to inertia or forgetfulness, could end up being money lost.
To add more money, you may need to pay purchase or reload charges.
Closed-loop card limit purchasing power
It can be very frustrating to lose a gift card, or have it stolen.
If you do not use your card, you could be subject to an inactivity fee.