A gift card is a card in which a prepaid money value is stored. It is usually issued by a business and can be used as an alternative to cash at an online or a physical store.
Like debit cards, gift cards have unique details written on them. These details are what you input at the checkout point of the affiliated store to make a payment. There are minimum and maximum amounts of money that can be preloaded into a gift card. The value of your purchase will be subtracted from the value stored in the card.
Unlike debit cards, they are generally anonymous and are usually disposed of when the stored value on a card is exhausted. Also, they cannot be used at ATMs for cash withdrawals.
What they are used for
As the name implies, they conventionally serve as gifts in situations where equivalent cash gifts might be a hassle or inappropriate to the recipient. Gift cards of any monetary value may be purchased from a business and gifted to the gift recipient who may use them to purchase a gift of their choice. They may choose to buy physical goods from international or local online stores or subscribe to services.
Big and small businesses like bookshops, clothing stores, restaurants, spas, and others issue gift cards. Some of them include: include Shoprite, Game, SuaveKenya, and others.
In many African countries, scarcity of dollars or other economic factors makes it difficult for consumers to pay on international websites with local debit cards so gift cards are used to purchase goods and subscribe to services from foreign businesses like ASOS, Nike, Spotify, Apple, Netflix, and others.
Types of gift cards
There are two types of gift cards: open-loop gift cards and closed-loop gift cards.
Closed-loop gift cards can only be redeemed at the merchant listed on the cards. For example, a Shoprite gift card can only be redeemed at Shoprite. Some closed-loop cards can be used within a family of stores. That is a chain of stores owned by the same parent company.
On the other hand, open-loop gift cards work like cash. They are perfect if you want to have a wide range of buying options. They can be redeemed almost anywhere they are accepted—restaurants, clothing stores, grocery stores, and more.
How to redeem a gift card
There are generally 3 ways to redeem your gift cards in Africa:
The card issuer’s physical store
This method is viable if the issuer has to have a physical store in your country. You can walk into the issuer’s outlet, purchase what the gift card can afford, and then pay with it over the counter. The cashier usually facilitates the payment.
The issuer’s online store
You can redeem your gift card online if the issuer has an online store. Such online stores have a redeem gift card option. Stores that enable online gift card redemption include Spar, Shoprite, Google Play Store, iTunes, etc. To redeem your gift card online:
- Log in to the site or app you want to redeem from.
- Go to the redeem gift card option.
- Put in the gift card code in the appropriate field.
- Fill in the total cost of the items you want to purchase.
- Choose the redeem option.
Selling the gift card for cash or cryptocurrency
Selling the gift card might be the best option for you if the issuer does not have a physical store in your area and you are unable to access or conveniently use the online store.
There are several platforms that exchange cash or cryptocurrencies for gift cards at good rates. When you use such platforms to exchange your gift card for cash, the cash will be deposited in your bank account or mobile money (MOMO) account upon confirmation of the transaction. If you sell it for cryptocurrency, the agreed value will be deposited in the wallet address you provided to the platform.
Platforms, where you can sell your gift cards in exchange for cash or cryptocurrency, include Cardtonic, Patricia, Presmit, and more.