In India, gifting is a wide spread phenomenon. You give gifts on birthdays, when a child is born and on other less happy occasions like marriages as well.
Buying physical gifts from malls and kirana stores is most common; some parents and grand parents have upped the ante by gifting life insurance policies especially from LIC. Another avenue less explored is the world of credit cards. A prepaid gift card can be the right substitute as well.
Let us see the various options.
What are prepaid gift cards ?
Such a card is similar to a credit card but is actually a prepaid card. The person giving the gift has to pay some amount to purchase or load the gift card. Much like a credit card, a magnetic strip at the back stores this amount used to load the card.
Since the amount has to be paid upfront, it is “prepaid”.
When you gift away this gift card to someone, they can use the charged up gift card to spend that amount of money. It is much like gifting a gift certificate. Since most of the gift card issuers have tie ups all over the country and across a wide spread of vendors, you can use these gift cards easily to spend your money on a variety of things of your choice.
Everytime you purchase something, the amount is deducted from the gift card and once you exhaust the total limit on the card, you can simply dispose of the card. Needless to say, unlimited transactions can be done on the card till the limit is all used up.
Since the card is meant to be used for gifts, you cannot use it to withdraw cash. Most of the gift cards will come with an ATM pin, Internet banking facilities and even a tele-banking pin to check for balance and see the transaction history.
To buy a gift card, you have to fill up a form and provide your identify proof and residence proof. Many issues like banks allow you to buy these online also.
Why use them ?
Such cards are better than carrying cash as cash can be cumbersome to handle and one can lose it as well. Cash is also not the in-style way to gifting anymore. A polished prepaid card is safe and if stolen, the bank can help to block it to avoid misuse.
Gift vouchers are also an alternative but then they have limited merchant outlets where they can be used.
Such cards can also be custom tailored to meet specific needs. By adding a custom message or name on the front of the card, it can make for an individualized gift.
Using a gift card is meaningful when you do not want to give cash as gift to someone or you yourself do not have a savings account, which is seldom the case.
Option available in India
Here are some of the cards available in India.
ICICI Bank Gift Card – This is available in any denomination of your choice and is between Rs 5,00 to Rs 50,000.
Central Bank of India Gift Card – This is a master card and available for any amounts between Rs 5,00 to Rs 50,000.
SBI Gift Card – This is a VISA card available for any amounts between Rs 5,00 to Rs 50,000. The card is valid for 1 year from date of issue.
Dhanlaxmi Bank Gift Card – This is a VISA card available for any amounts between Rs 5,00 to Rs 50,000 in multiples of Rs 100.
HDFC Bank Giftplus Card – This is a VISA card and valid for 1 year. Charges are Rs 100 for issuance.
The market for gift cards and vouchers in India was sized at $403.8 million in 2011, with a 30% growth rate. That indicates the potential which gift card issuers have. A prepaid gift card is a very personal and safe way of gifting but not very rampantly used in India.
Have you used it ever ?