Gift Cards vs. Gift Certificates: What’s the Difference?

Marketing is recognized as the foremost pillar upon which the framework of a business is built. This is the precise reason why businesses allocate billions to formulating effective marketing strategies. Among this wide marketing pool gift cards and gift certificates are acknowledged as formidable tools that have benefited businesses around the world.

However, most competitive firms have yet to realize the fundamental difference between gift certificates vs gift cards. Some of the top-tier advantages of using gift cards and certificates are:

• Gift certificates and cards enhance brand visibility and improve customer loyalty.
• The overall reach of the business scales as new customers are attracted.
• The revenue-making potential of a business is maximized.
• It adds a sense of convenience which elevates the customer purchase experience.

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Overall, the introduction of digital and physical gift cards has allowed companies to interact with the target audience more efficiently. Therefore, the concept is adopted by multiple multinational companies, budding start-ups, and brick-and-mortar stores.

Let us now divulge into the world of gift vouchers and unearth the primary differences between gift cards vs gift certificates.

Brief Overview of Gift Certificates

Physical gift certificates were initially adopted by local brick-and-mortar stores as an effective marketing strategy to promote business among the target audience.

However, this approach was soon replaced by the incorporation of digital gift cards which allowed users to avail lucrative offers while initiating purchases from the comfort of their homes.

The concept of gift certificates was established in the 1930s which predominantly took center stage in the 1970s as a principal marketing tool. McDonald’s was the first brand that effectively utilized gift certificates to reach the masses with its special Christmas gift certificate campaign.

McDonald’s approach revolutionized the marketing dynamic as various other small-scale businesses were quick to jump the gun by implementing gift certificates into their marketing programs. The concept was positively accepted by the people at large as businesses were able to scale revenue in the long run.

With time gift certificates were upgraded to gift cards equipped with a more dynamic design and robust packaging. The old-school gift certificates were prone to wear and tear as they offered a limited shelf life.

However, with the integration of improved plastic gift cards, users could now store and apply the coupons according to their convenience.

The turn of the millennium saw Starbucks use gift cards to unlock new popularity levels. According to recent reports, between 2007 and 2014, the overall sale of gift cards increased from 80 billion USD to 124 billion USD.

The present generation of gift cards has adopted a digital form to further enhance convenience among customers.

Benefits of Gift Certificates

Here are some of the major benefits of using gift certificates:

1. Additional Convenience and Flexibility

The overall purchasing experience of a customer is significantly enhanced with the use of gift certificates. Individuals have the freedom to purchase any item or render any service of their choice. 

With the introduction of e-certificates users can now initiate purchases from remote locations. Moreover, the redemption process for gift certificates is fairly straightforward. Gift certificates also act as a formidable gifting option which is widely practiced by people around the world.

2. Encourages Spending and Budget Control

The application of gift certificates creates a win-win situation for both the customer and the business involved. Gift certificates encourage spending ensuring that customers add more items to their cart to relish lucrative deals and discounts.

Whereas, on the flip side, customers can monitor their finances and work within a defined budget with the assistance of gift certificates. The services offered by gift certificates can also be customized according to the independent needs and preferences of the customer concerned.

3. Attracting Eyeballs and Reduced Returns

The use of gift certificates is sure to attract more customer eyeballs, in turn, allowing a business to maximize its revenue-making potential. The inflow of new customers is always maintained with the diverse application of gift certificates.

The certificates enhance customer retention and loyalty as they encourage individuals to come back after initiating the initial purchase. Moreover, the decision to redeem a gift certificate entirely depends on the customer concerned, consequently, limiting the number of return orders requests.

Comparing Gift Cards With Gift Certificates

The primary objectives of gift certificates vs gift cards are essentially the same. Both concepts serve as an effective marketing tool that boosts sales and revenue in the long run. However, there are conceptual differences between e-certificates vs gift cards, contributing to extending their polarity.

1. Physical Form

The primary difference between gift certificates and gift cards is related to their physical form. Gift certificates are popularly circulated in physical copies, represented with a paper document.

The physical availability of gift certificates makes them more tangible. Though they can be found in digital form as well, they are popular in physical form.

Moreover, gift certificates are paired with unique barcodes which give the voucher a defined value. On the contrary, gift cards adorn a digital role that is purchased by customers through various digital platforms.

2. The Value of the Voucher

Gift certificates are generally paired with a specific product or service. Gift certificates can be classified as a voucher that allows an individual to avail upgraded services. For example, “Unlimited Drinks for an Hour” is a popular form of gift certificate that is issued by multiple restaurants and cafes.

On the other hand, gift cards are traditionally paired with a specific value that assists customers to avail discounts on the purchases made. For example, purchasing a $100 Amazon gift card enables the user to buy any product of their choice with an additional wallet balance of the equivalent amount.

3. The Redemption Process

The redemption process also allows us to acknowledge the differences between gift cards vs gift certificates. Gift certificates offer additional redemption flexibility. For example, a “Free Massage” gift card issued by a spa can be applied to a wide range of massages. Thus, offering elevated flexibility for the general users.

On the other hand, gift cards are generally tied to a specific service or store, in turn, restricting a customer from redeeming it freely. Moreover, gift certificates are mostly preferred by physical stores and outlets. Gift cards are conventionally adopted by service providers operating on a digital level.

Merchandise Certificates vs Gift Cards

Merchandise certificate is another classification of a gift certificate, serving a completely difference purpose. The fundamental difference between merchandise certificates vs gift cards is related to its overall reach.

Merchandise certificates are limited to physical stores as users cannot redeem the certificate in any other outlet. Similar to conventional gift certificates, merchandise certificates are also printed on paper catering to a defined tangible lifespan. Additionally, merchandise certificates are paired with an expiration date.

Customers have a limited timeline to redeem a merchandise gift card. However, gift cards are not limited to a specific expiry date and are conventionally available in digital forms. Gift voucher users are recommended to verify the terms of service of the card or certificate before making the final redemption decision.

How to Use a Gift Certificate?

Using a gift certificate is fairly straightforward. However, users must identify the type of gift certificate available to effectively initiate the correct redemption process. Physical gift certificates can be redeemed at the assigned physical store or outlet by scanning the unique bar code at the time of checkout.

Digital gift certificates can only be redeemed through online portals as it depends on the availability of internet amenities. Follow these steps to use a digital gift certificate:

• Step 1: Visit the official website of the service provider that issued the certificate. For example, you can redeem Amazon gift certificates by using an Amazon account listed on the Amazon platform.
• Step 2: Log in with the respective user credentials.
• Step 3: Apply the unique code printed on the certificate.
• Step 4: Check the account balance to verify the gift certificate application.
• Step 5: Add items to the cart and enjoy the benefits offered by the digital certificate at the time of checkout.

Other additional measures may include the disclosure of the payment credentials of the registered customer. Ensure to seek assistance from the gift certificate issuing company to learn more.

Do Gift Certificates Expire?

The overall expiration timeline criteria of a gift certificate entirely depends on the company issuing the certificate. Gift certificates are conventionally scheduled to expire as they are mostly available in physical forms susceptible to wear and tear. 

Additionally, the formulation of the Credit CARD Act in 2009 makes it mandatory for gift certificates to retain their value for a minimum timeline of 5 years from the date of purchase.

Other state laws imposed further extend the lifespan of a gift certificate. For instance, the state of California prohibits retailers from pairing gift certificates with an expiration date.

Therefore, users must verify the expiration date of a gift certificate before making the final purchase decision. Retailers are encouraged to list details about gift certificate validity on every physical copy to avoid confusion.

Are Gift Certificates Region-Locked?

Multinational companies issuing gift certificates are conventionally not limited by location or geographical boundaries. Companies like Amazon, Starbucks, and Apple have outlets around the world. The gift certificates, regardless of the issuing location, are accepted across all outlets.

Additionally, digital gift certificates are not limited to regions as individuals can effectively redeem coupons through online platforms. However, gift certificates issued by local retailers and regional chains are limited with region locks. Customers are recommended to verify the regional obligations of a gift certificate before making the final purchase.

Can You Transfer a Gift Certificate to your Bank Account?

Transferring a gift certificate to a bank account cannot be executed as the voucher is only meant to be used as an alternative payment option. The intended purpose of a gift voucher is to encourage a customer to initiate a purchase from the certificate issuing company.

The value of a gift certificate cannot be transferred to a bank account. However, a gift certificate holder is free to resell the item to another user in exchange for monetary compensation. Various online platforms primarily deal in reselling and exchanging gift certificates. Ensure to conduct thorough online research to learn more about such platforms.

Recommended read: Transfer money from gift card to bank account

Conclusion

These were some of the foremost aspects related to gift certificates vs gift cards. Be sure to acknowledge the difference highlighted above to purchase the gift voucher type complementing your needs. Check out Send Credit to avail a wide range of gift cards listed at affordable pricing points.