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Gift cards have become a popular choice for gifts, providing recipients with the flexibility to purchase what they truly want. But how do gift cards work? Understanding the mechanics behind gift cards can help consumers make informed decisions and maximize their value.

When you purchase a gift card, you typically pay a specific amount of money upfront, which is loaded onto the card. This card functions as a prepaid debit card that can be used at specific retailers or brands. The funds are electronically tracked, and the balance decreases as purchases are made, making it convenient for both the buyer and the recipient.

• Types of Gift Cards: Gift cards generally fall into two categories: store-specific and open-loop. Store-specific gift cards can only be used at designated retailers, while open-loop cards, such as Visa or Mastercard gift cards, can be swiped anywhere that accepts those forms of payment.
• Redemption Process: To use a gift card, you present it at the point of sale, where the cashier will swipe or manually enter the card number. The total purchase amount is deducted from the gift card balance.
• Expiration and Fees: It’s essential to be aware that some gift cards may have expiration dates or maintenance fees that can reduce their value over time. Always read the terms and conditions before purchasing or using a gift card.
• Buying and Gifting: Most retailers offer gift cards for sale in-store and online, making them a versatile option for gifting during holidays, birthdays, or any special occasion.

In essence, gift cards offer a straightforward method of gifting while allowing recipients the freedom of choice. Understanding how they work enhances the experience for both the giver and receiver, ensuring everyone benefits from this convenient gift option.