Nov 22, 2012, 03.35 PM | Source: Moneycontrol.com
Gifting to your loved ones is an essential part of Indian culture and is special. However, it often leaves many of you hassled as you are unable to come up with appropriate gifting ideas.
, BankBazaar.com | Capital Expertise: Mutual Funds
Gifting to your loved ones is an essential part of Indian culture and is special. However, it often leaves many of you hassled as you are unable to come up with appropriate gifting ideas. For all those of you who face a tough time in choosing gifts, a pre-paid gift card is an excellent option. Read on to understand more about pre-paid gift cards.
What is a pre-paid gift card?
The pre-paid gift card is a smart gifting solution which essentially works like a gift voucher. A pre-paid gift card is a magnetic strip based pre-paid card which looks similar to a credit card or debit card. However, a pre-paid gift card is neither a credit card nor a debit card in entirety. It is not like a credit card as it does not allow the user to accumulate debt on the card. It is also not like a debit card as the amount spent is not linked to the bank account.
You can purchase pre-paid gift cards from banks by paying the value of the pre-paid card along with any joining fees, if applicable. Once the bank receives your funds, the card will be activated with the loaded amount. You can then gift this activated pre-paid gift card to anyone, and the recipient will be able to use it across merchant outlets which accept that particular type of card (Visa, Mastercard or American Express, as the case may be). Every time the gift card is used, the purchase amount is deducted from the card balance. The recipient can use the card till the entire amount is used.
Features of pre-paid gift cards?
Pre-paid gift cards are issued by most leading banks in the country, in association with Visa, Mastercard or American Express. Some online portals also sell pre-paid gift cards.
A nominal fee of Rs.50 - Rs.100 + service tax is charged as joining fee when you purchase the pre-paid gift card. In the case of loss of card, a similar amount is charged for a card replacement. Some banks levy similar amounts towards other charges like requiring physical statements, regeneration of the PIN, cancellation etc.
Most banks do not require the purchaser of the gift card to be their customer. If the purchaser is not a customer of the bank, then a full KYC is carried out. The purchaser needs to provide a proof of identity card and a residence proof along with the completed gift card application form. On the other hand, if the purchaser is a customer of the bank, then such formalities are not required.
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