| A gift card is essentially the electronic version of | | | | interactive cards may have video games, music |
| a traditional paper gift certificate. As we all know, | | | | downloads, and purchasing suggestions and offers. |
| a gift card is easy shopping and a way to give a | | | | Personalized cards allow purchasers to choose |
| gift while allowing the recipient to choose the | | | | from different designs and even upload their own |
| items he or she wants. Typically, the gift giver | | | | images for the cards. This turns an impersonal gift |
| buys a card from a merchant or bank for a | | | | into a customized and personal one. |
| specified amount of money. The recipient can | | | | Online gift cards are purchased online and sent via |
| either buy something, or, in most cases, redeem | | | | email, reducing the production and processing |
| the card for cash. | | | | costs for the retailer. Such virtual gift cards offer |
| Gift cards are big business. According to a | | | | a high level of personalization, with customized |
| Consumers Report survey, they are the | | | | product promotions and incentives. |
| most-wanted gifts for women and the third most | | | | A variety of online marketplaces offer discounts |
| desired gift by men in the U.S. The 2007 survey | | | | on gift cards. Some sites allow consumers to |
| found that 62 percent of consumers planned to | | | | search for the desired product or product |
| give cards that year, second only to clothing, | | | | category and buy cards for them. Gift card |
| which 71 percent planned to give. | | | | exchanges allow people to sell or exchange |
| Two types | | | | unwanted cards. |
| Consumers can choose between two basic types | | | | Perhaps the most innovative application connects |
| of gift cards. More popular are the cards | | | | cards with live and interactive TV and Internet |
| consumer purchase from retailers, called closed | | | | programming. The industries of the gift card |
| loop cards. They can be used only at the retailer's | | | | companies are incorporated into the content of |
| store (and perhaps at other stores owned by the | | | | the programming segment. Viewers can purchase |
| parent firm). Retailers usually do not charge to | | | | cards in real time as they watch. In many cases |
| buy or use their cards. | | | | they also receive bonus cashbacks for gift card |
| Bank-issued, or open loop, gift cards are typically | | | | purchases they make during the interactive |
| associated with a major credit card. Most | | | | programming segments. Programs are typically |
| merchants that accept that credit card will also | | | | broadcast seven days a week on specific |
| accept the cards. Banks charge a fee to buy a | | | | networks and during particular TV shows. |
| gift card; other charges may apply. | | | | Pros and cons |
| Innovations | | | | For merchants and customers, gift cards have |
| The gift card industry is dynamic and innovative, | | | | many advantages. As with all business |
| constantly finding new ways to apply the gift card | | | | transactions, consumers should read the fine print |
| concept and expand the technology. | | | | and make sure they understand the costs and |
| Interactive gift cards have content burned into | | | | limitations of the cards before they purchase |
| them. Some have a hole in the center and play | | | | them. |
| like DVDs. Depending on the retailer, these | | | | |