Prepaid Gift Cards vs Gift Cards: Understanding the Differences

BY Lucy Fang
Mar 16, 2024
Types of Gift Cards

When it comes to the corporate gifting industry rewards and customer incentives, then the comparison between prepaid gift cards and traditional gift cards is important. Giving that this application could help the business to make decisions, it is critical to be able to distinguish between the two. Therefore, this blog will have explained the difference between prepaid gift cards compared to the regular ones and when each is applicable to have a clear understanding of prepaid gift cards vs gift cards.

Prepaid Gift Cards vs Traditional Gift Cards: What’s the Difference?

Prepaid gift cards, as the name suggests, are also loaded with a certain amount of money, but they tend to be accepted in most places where the card’s network, such as Visa or Mastercard, are accepted. Although they offer a wider range of use, they frequently come with additional activation fees. On the contrary, traditional gift cards are retailer-specific and applicable only at the designated stores or service providers.

Advantages of Prepaid Gift Cards

  • Wide Acceptance: the cards are acceptable in many retailers and a recipient can be offered to more options to do their shopping.
  • Financial control: the cards offer the ability for one to control their shopping as they can be set to a specific usage.
  • Security: for lost cards, one can always cancel them and have new ones issued to prevent fraud.

Advantages of Traditional Gift Cards

  • Brand-specific experience: regular gift cards are usually to be spent in a certain store or on a service, which means that the recipients might have to explore a new independent store or pick one of the tempting options.
  • No additional fees: most gift cards do not come with an activation fee, in contrast to the majority of prepaid offerings.
  • Personalization and branding: it is possible to order regular gift cards with the company’s logo and design. This way, they can be used as a marketing tool.

Choosing the Right Option for Your Business

Thus, before browsing through the available options, take the time to validate your intentions. If you aim to advertise, demonstrate support for your company’s or partner’s outlook or increase brand awareness, traditional gift cards are ideal solution in terms of cost efficiency and brand orientation. They are also an ideal match for promoting a specific store or trade name and are consistent with focused marketing campaigns. In the case in which you are more interested in a general reward, the prepaid options are more suitable given their enhanced customization possibilities. They are a great option when the beneficiaries of your program value the liberty to use the reward any way they see fit. Regardless of your decision, bear in mind that most prepaid cards come with additional expenses such as activation or transaction fees. Therefore, it is not just good practice to calculate them but also a measure of transparent allocation of your budget. Decide by evaluating the viewer’s preferences, your program’s characteristics and expense settings. This way, you will ensure that your decision corresponds to both your methodological pathway and cost regime, generating efficiency and effect regarding the other.

Its not only important to understand the differences between the types of gift cards it is also important to understand the differences between reward cards and incentive cards. Check out our comprehensive guide: “Reward vs Incentive Prepaid Cards: The Complete Guide“.

Both prepaid and traditional gift cards offer unique advantages for business rewards and incentives. The choice depends on your specific business objectives, budget, and your recipients’ preferences.

Unsure which gift card option is best for your business? Contact All Digital Rewards for expert advice and tailored corporate gifting and reward strategy solutions.