Gift card terminology: Unlock the language of gifting

Explore the key terms to enhance your understanding of gift cards

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Restricted Loop prepaid card

Prepaid cards that can only be redeemed in the retailers that subscribe to the programmes that the card relates to.

Retailer

A traditional retailer issuing their own branded solus retailer Gift Card.

Manufacturer

A company responsible for the design or creation of a Gift Card.

Aggregator

A company who provides a service allowing other companies to purchase multiple Retail or Issuer Gift Cards.

Gift Card Processor

A company who provides the technology architecture for a Gift Card program.

Payments & Financial Solutions

A company who works within the Payments or Financial Solutions sector.

Reward & Recognition/Incentive & Motivation

A company who provides a platform dedicated to rewards or incentivising the end user.

Employee Benefits/Voluntary Benefits

A company who provides a platform dedicated to providing employee benefits, normally in the form of discounts, to the end recipient.

Travel & Airline

A company who works within the Travel and Airline sector, either running a Gift Card program or providing a loyalty/cashout facility.

Consultant

A business or individual dedicated to supporting other companies in the Gift Card market through a consultative approach.

Gift Card Representation Agency

A company who acts as an extension to a retail partner to allow that retail partner to enter the Gift Card market.

Consumer Resell or Cashout

A company who trades directly with consumers to sell or provide a cashout facility for Gift Cards.

Paper Voucher

The original format of delivery a Gift Card. Whilst the Paper Voucher is certainly in decline compared to the previous two, they do still form a part of the Gift Card industry.

Digital/eGift Cards

The electronic format of a Physical Gift Card, this is typically delivered by email and may have additional functionality such as wallet provision and live balance updates.

Processor

There are terms used to describe the companies or suppliers across the Gift Card Industry - one includes a gift card processor. To create a Gift Card that can be activated and redeemed more than once and allows the customer to balance check the card, you need a processor. The processor creates a unique code and pin that is associated to the physical or digital card that allows the card to be activated and redeemed. Processors are required on open and closed loop gift cards if you want them to have all the functionality listed.

Multi Choice

These provide a two-step redemption platform allowing consumers to exchange their credit for a closed loop gift card across a variety of retailers.

Prepaid Cards

This is an umbrella definition referring to all the cards in the prepaid market. Unlike credit cards, prepaid cards are pre-loaded with a value, and you can only spend up to that value. That is to say, you won’t be given any credit that you can off at a later date. As well as gift cards, the prepaid card market also covers travel money cards, prepaid debit cards, salary and payroll cards, expense card, insurance replacement cards, various government cards and even transportation cards such as the oyster card used on the London Transport. The simplest way to differentiate between a Prepaid Card and a Closed Loop Gift Card is visually. Typically, Prepaid Cards require the use of a payment network such as MasterCard or Visa to operate, due to their broadness. These logos will feature on the front of the Gift Card and are visible to the consumer. They are also subject to eMoney Licensing.

Gift Cards

This is the umbrella term that often references any type of Gift Card.

Issuer

A brand issuing a Gift Card that is not a solus retailer Gift Card.

Physical Gift Cards

The physical product that is now most printed on a cardboard type product.

Implied Loop prepaid cards

Prepaid cards that can be redeemed in any retailer that displays the Master Card or/and Visa logo, but the programme only promotes certain retailers or products, implying that the card is to be used for only these.

Open Loop Prepaid card

An “open loop” card is a card that can be spent with a number of different merchants. The cards issued and redeemed using the open payment network such as MasterCard or Visa. This means an open loop card using the MasterCard network, for example, can be spent at all the places where MasterCard is accepted.

Controlled Loop prepaid card

Prepaid cards can also be categorised as “controlled loop/semi-open/restricted loop cards”. In this instance, card utilise the open payment network for redemption. However, redemption is restricted to selected merchants.

Closed Loop

Most retailer gift card programmes are “closed loop”. This means that the retailer that issues the card also redeems the card. You will not be able to spend the money on the card anywhere other than back with the retailer from where it was purchased. The simplest way to differentiate between a Closed Loop Gift Card and a Prepaid Gift Card is visually. Typically, Prepaid Cards require the use of a payment network such as MasterCard or Visa to operate, due to their broadness. These logos will feature on the front of the Gift Card and are visible to the consumer. They are also subject to eMoney Licensing.