Gift Cards are a modern day version of gift certificates. They can be used as a cash substitution and are often given as gifts on special occasions such as birthdays, Christmas, graduation and any other day that a gift may be in order. Gift cards can also be given as a form of in-store credit when an item is returned and cash back is not an option.

Gift cards are available from many retailers both in store and online. There are also medical gift cards available in some cases which can be used for co-pays and prescriptions. Another form of gift card is one with a major credit card logo, such as a Visa gift card, these gift cards are not for any specific retailer but for any store that will honor them, as they are used like a pre-paid debit card.

Gift cards have become very popular and by 2007, were ranked as the second most commonly planned gift in the United States. Another statistic stated that they were the second most wanted gift by women, and the third most wanted gift by men. http://www.consumerreports.org/cro/money/shopping/shopping-tips/gift-card-pitfalls-12-07/overview/gift-card-pitfalls-ov.htm

One reason gift cards have become popular is because it lessens the stress of finding the perfect gift for a friend or family member. In 2006 roughly 1.8 billion dollars were spent on gift cards in Canada and in 2009 an amount of 3 billion dollars were spent on gift cards in the United Kingdom. The United States has the highest amount of dollars spent on gift cards, reaching an amazing 80 billion dollars in 2006. http://www.nytimes.com/2007/01/07/magazine/07wwln_freak.t.html

Typically gift cards have no value until they are purchased. When the card is purchased, the cashier will add a specified amount of money to the card and activate it for use. The cards are then given to the recipient, who can return to the retailer and use the money on the card much like cash to purchase whatever they choose. Because gift cards are quick and easy to purchase, they are often purchased as last minute gifts.

Some cards, such as those purchased online, are already loaded but must be activated by calling a phone number and giving the activation code on the back of the card.

Each card has its own terms and conditions, which can include a number of fees and hidden costs. Cards can also expire. More information on fees can be found on the page How to Avoid Gift Card Fees.

Some merchants also have terms or rules for the conditions in which cards can be redeemed. How to Redeem a Gift Card has additional information on this subject.

Retailer specific cards can only be redeemed at the retailer they were purchased from. Many shopping malls also offer universal gift cards, that may be redeemed at any store within the specific mall or chain of malls, allowing more variety for the recipient. Several major credit card companies offer cash based gift cards, which are pre-loaded debit cards that may be used anywhere the credit card type is accepted. More recently, a few companies, such as Visa, offer medical gift cards that can be used for medical co-pays, prescriptions and insurance deductibles.