You’ve probably heard or seen people talk about buying or using gift cards, and you’re probably wondering what they do with them. Gift cards, often known as gift vouchers, are one of the most significant innovations in financial technology today. Cash payments were the predominant payment method prior to the introduction and acceptance of point of sales (POS) for store transactions. People nowadays can travel with a significant amount of money stored in a digital or plastic card known as a gift card.
Here’s all you need to know about gift cards and how they work:
What Is a Gift Card?
A gift card is a type of prepaid debit card that has a certain amount of money that may be used for a variety of purchases. Store gift cards are intended to be used at specific merchants or stores, whereas general-purpose prepaid gift cards are not tied to any specific merchant and can also be used to withdraw cash from automated teller machines (ATMs).
Advantages of Gift Cards
#1. They Are Ideal for Gifting
We’ve all been in circumstances where we’re at a loss for what to get someone for a particular occasion or just because; that’s where gift cards come in. Did you know that gift cards made for 68% of all birthday presents? Gift cards are not just for birthdays; they are also appropriate for a holiday celebration, an anniversary, or any other special occasion. Get a gift card from their favorite store as an added bonus.
#2. Payments are much more convenient
When the COVID-19 pandemic struck, most retail establishments and even restaurants implemented a cashless policy. This meant that only credit card payments were accepted. Gift cards make it much easier to pay for products and services because you don’t have to carry your bank card with you all the time.
#3. Can Be Used To Limit Overspending
Most vouchers restrict you from spending more than the amount on the card. As a result, a gift card can assist you in developing a spending budget in order to avoid overspending, which is common when buying with cash or a bank card.
How You Can Use Gift Cards
#1. Buying Goods and Services
This is the most obvious and widely used application for a gift card. As previously stated, gift vouchers can be used to purchase goods and services in retail stores, restaurants, petrol stations, internet retailers, and pretty much anywhere else that takes them. They function similarly to standard bank debit cards and even cash.
#2. Gift Cards Are Ideal for Gift Giving
Gift cards are ideal for gift-giving. Vouchers give the recipient complete control over what they buy. With a specific amount on the card, the receiver can purchase whatever they want from the store. Have a friend or partner bugged you about anything from a particular store, but all you can remember is the store? Don’t worry; give them a store gift card and let them buy it themselves. They do not need to be aware that you forgot.
#3. To Promote a Business
Physical gift cards normally have the business logo plainly printed on them, which functions as an advertisement space because other people will notice the logo and learn about your business’s existence, promoting it. Also, because gift cards are small, they may be readily carried around in wallets, purses, bags, and other places; the more people that see the voucher, the more people will learn about your company.
#4. For Keeping Money
Some gift cards have an expiration date, which means the funds must be used before then or they will be lost. However, some cards never expire. These cards, which do not have expiration dates, are a great way to save money for later usage.
#5. To Exchange for Cash
You can make money with your gift card by exchanging it for cash. Over 3 billion US dollars were left unused in gift cards in 2019 alone, which is extremely frequent even in other nations throughout the world. The most popular branded gift cards in Nigeria do not work and are thrown away, but you can sell these cards for cash by using the finest gift card trading software in Nigeria, Cardtonic.
How Can Gift Cards Be Redeemed for Cash?
Instead of spending gift cards in the stores where they were issued, you can always swap them for cash. When you exchange gift cards for cash, you can use the money to buy other things.
Most likely, you will not require the products or services offered by the company that issued the gift card. For example, if you have a Google Play gift card, you may not need to make any in-app purchases. As a result, swapping gift cards for cash is a no-brainer.
The idea of exchanging gift cards for cash is simple. One person purchases gift cards and sells them to another. Many people want to exchange their gift cards for cash.
However, due to the prevalence of internet scams, it is advisable to provide gift cards to certain websites and apps. Well-known companies support these platforms. Once you’ve identified the best one, you’ll get the best trading rate and your money right away.
The main advantage of selling to specialized gift card trading companies in Nigeria is security. You have faith that the company will not steal your money.
However, you should exercise caution in this case as well, because a large number of fraudulent websites are appearing. Always conduct research to ensure that the firm from whom you are purchasing is legitimate.
Types of Gift Cards
There are both physical and electronic gift cards available.
Physical cards are branded plastic cards purchased from physical stores.
E-gift cards are often referred to as E-codes. You can buy these digital codes online and have them emailed or texted to you.
How is the Nigerian Gift Card Industry Doing?
As is well known, gift card payments online are not very frequent among Nigerians. As a result, when they receive a gift card, such as an iTunes gift card, whether they purchased it or received it as a gift, they prefer to swap it for cash so they may use the money to purchase something better.
To remedy this issue, business-minded individuals built online marketplaces, offering a venue where individuals could sell gift cards in Nigeria effortlessly and without stress.
How Do You Exchange Gift Cards For Cash In Nigeria?
You’ve probably wondered, like most others, how people who trade gift cards make money. Essentially, they purchase gift cards at a cheaper cost and resell them at a higher cost. For example, if someone is prepared to sell a $100 Amazon gift card for $60, the buyer can later swap it for $80 and pocket the $20 profit.
If the buyer continues to operate in this fashion, he or she will end the month with a substantial profit.
Before you start buying gift cards and selling them to make money, there are a few things you should know, such as how to advertise your business (this, in my opinion, will make or break your business), how to purchase gift cards at a discount, where to sell your gift cards, and so on.
Some gift cards may be considered worthless since they cannot be used in Nigeria. Furthermore, you may simply not wish to use the card. To alleviate this difficulty, gift cards can be swapped for cash. You can utilize several gift card exchanging sites to accomplish this.
Although the procedure varies based on the platform, the following steps are commonly followed:
- 1. First, create an account.
- 2. Enter your credit card details.
- 3. Trade!
How to Get Customers for Your Gift Card Business
Your ability to trade gift cards in Nigeria will be determined by your ability to get clients for your business.
There are various methods for attracting customers, including the following:
- Inform everyone in your family and circle of friends about your business so they can put you in touch with anyone who wants to sell their gift cards.
- Make your firm known by promoting it on well-known social media sites such as Facebook, Instagram, and WhatsApp.
- Create a website: Having a website gives your company a more professional appearance, and if you know a little bit about crypto SEO (search engine optimization), you can use this platform to attract customers.
- You can also print banners about your firm to distribute to the general public; the banner should include your contact information, such as your website address, phone number, and other methods of contact.
- Have a referral program in place, such as a reward for consumers who suggest you to others. In this manner, you can continue to earn clients while others promote your company.
Once you have satisfied your first few clients, you will continue to obtain repeat business.
Benefits of Gift Cards
Gift cards can provide a number of benefits. As an example:
- If you don’t want to pay with cash or a credit card, they can be an excellent alternative.
- Gift cards are an excellent choice for the holidays or any other special occasion.
- Gift cards can be used to manage spending (and hence avoid bank overdrafts).
- They can be simple and easy to use.
Gift cards may be preferable in terms of gift giving if you have no idea what to buy for someone on your gift list because they allow the receiver to buy what they want and when they want. Just keep in mind that choosing closed-loop gift cards over open-loop gift cards limits the giftee’s options for where the cards might be used.
If you want to use gift cards to teach your children the fundamentals of spending, you should look into prepaid debit cards for teens. They function similarly but are usually open-loop.
The Drawbacks of Gift Cards
Gift cards might also have some disadvantages. Here are five examples.
- Following gift card purchases, there may be a little amount of money left over, which if not used, whether due to forgetfulness or inertia, results in money squandered.
- To add money, you can pay purchase or reload costs.
- Cards with closed loops limit your purchasing power.
- Losing or having a gift card stolen can be inconvenient, especially if you failed to register it or preserve the gift card number.
- If you do not use your card, you may be charged an inactivity fee.
In Conclusion
Gift cards can be used to make purchases both online and in-store. You can buy gift cards to give as gifts to friends and family, or you can earn them as a reward while purchasing from a certain merchant. Understanding how gift cards function and where they can be used is critical for avoiding fees or the risk of a gift card expiring. Simultaneously, it’s critical to be on the alert for gift card scams, especially during the holiday season when more people buy and use them to spend.
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