What is Gift Card Used For: Comprehensive Guide 2024

what is gift card used for
what is gift card used for

what is Gift Card Used for? Discover the multifaceted uses of gift cards beyond the traditional gifting purpose. Learn about different types of gift cards, their services, benefits, and even some downsides. Your one-stop comprehensive guide on gift card uses.

What Is a Gift Card?

A gift card is a prepaid stored-value money card, usually issued by a retailer or bank. It is commonly used as an alternative to cash for purchases within a specific store or related businesses. They are convenient and flexible and make for an excellent gift for both personal use and corporate incentives.

Types Of Gift Cards

Gift cards come in two primary types:

Open Loop Gift Card

Open-loop gift cards are network cards bearing a logo of the card network, like Visa, MasterCard, Discover, or American Express. These cards can be redeemed anywhere where that specific card type is accepted.

Closed Loop Gift Card

On the other hand, closed-loop gift cards can only be redeemed at the specific retailer or group of retailers that issued the card. These cards are often adorned with the branding of the issuing store or restaurant. for example we have iTunes gift card, steam wallet gift card etc.

The Evolution of Gift Cards

Gift cards have come a long way since their introduction. They have evolved from physical cards to digital formats, giving rise to e-gift cards. These e-gift cards can be bought and sent online, providing the user with greater convenience and flexibility.

what is gift card used for

What is gift card used for?

Gift cards are incredibly versatile, offering numerous possibilities beyond their most obvious use – gifting. Here’s how they are being utilized:

To Promote Business

Many businesses leverage gift cards as a strategic marketing tool. They can drive traffic, attract new customers, and incentivize repeat business. Companies can effectively enhance their brand’s visibility and reputation by offering gift cards.

To Purchase Goods and Services

Gift cards are most commonly used to purchase goods and services. They offer a convenient and secure payment option in physical stores and online. Customers can buy products or services up to the preloaded value on the card.

Use As a Gift Item

Gift cards make for the perfect gift, especially when the giver is unsure about the recipient’s preferences. They offer the receiver the freedom to choose what they want, leading to a higher satisfaction rate than traditional gifts.

Attract New Customers

Gift cards can act as a powerful customer acquisition tool. When existing customers give gift cards to friends or family, it encourages these potential customers to visit the store, thus expanding the business’s customer base.

To Reward Employees

Gift cards can also serve as a practical and appreciated form of employee recognition. Companies can offer them as performance incentives or holiday bonuses, boosting employee morale and productivity.

For Storing Money

Some individuals use gift cards as a means to store money. With reloadability and long expiry dates, these cards are a convenient alternative to carrying cash or other payment methods.

Trade Gift Card For Cash or Cryptocurrency

Several online platforms enable users to trade their gift cards for cash or even cryptocurrencies. This method allows people to liquidate their unwanted or unused gift cards.

Increase Brand Awareness

Gift cards often carry the company’s logo and design. As they are shared and gifted, these branded cards serve as a marketing tool, enhancing brand awareness and recall.

To Reward Loyal Customers

Businesses can use gift cards as part of their customer loyalty programs. Regular customers can earn gift cards based on purchases, encouraging repeat business and fostering a stronger relationship with the brand.

To Escape Credit Card Charges

Gift cards can also serve as a means to bypass credit card charges. Some consumers prefer using gift cards instead of credit cards to avoid the risk of overspending and incurring interest charges.

The Impact of Gift Cards on Consumer Behavior

Gift cards can significantly influence consumer behavior. Research shows that customers with gift cards are more likely to pay the total price for a product instead of waiting for a sale. Also, gift card users often spend more than the card’s value, increasing business revenue.

Benefits Of Using Gift Cards

Gift cards come with several benefits:

Increase Sales Revenue

Businesses benefit significantly from gift cards as they encourage additional purchases, often exceeding the card’s value. They help companies to improve their cash flow and boost overall sales revenue.


From a customer’s perspective, gift cards can be an excellent budgeting tool. The prepaid nature of the cards allows customers to control their spending and manage their finances better.


Gift cards offer unparalleled convenience. They are easy to purchase, easy to gift, and easy to use, both in physical stores and online.

The Role of Gift Cards in the Digital Economy

With the advent of digital wallets and online shopping, gift cards have become increasingly significant in the digital economy. They provide a secure, cashless payment option catering to the growing trend of online shopping and digital transactions.

Disadvantages Of Gift Cards

Despite the myriad benefits, gift cards do have a few downsides. They can come with expiration dates or service fees, reducing the card’s actual value. Additionally, if a gift card is lost, it may not be replaceable, leading to a total loss of value.

How to Maximize the Value of Your Gift Cards

To make the most out of your gift cards, consider combining them with sales or coupons, sell or exchange unwanted cards, or even regift them. Also, ensure to use your gift cards before the expiration date.


Gift cards have transformed from a simple, last-minute gift option to a powerful tool for businesses and a convenient method for consumers to engage with brands. As we continue moving towards a more digital and cashless society, gift cards’ potential uses and benefits will likely keep expanding.

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