Introduction to Gift Cards for Kids and Teens
This video explains the concept of gift cards in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about gift cards, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
- What is a gift card
- Different types of gift cards
- Minimum or maximum amounts for gift cards
- Advantages / pros of a gift cards
- Disadvantages / cons of a gift cards
What is a gift card?
A gift card is a prepaid card that is often given as a gift, and can serve as a more thoughtful alternative to cash.
Gift cards can be physical cards or digital cards – also called eGift cards – and are available at a wide variety of retailers, from department stores to coffee shops!
Generally, a retailer’s gift card can only be used to buy things from that retailer, either online or at a store.
Are there different types of gift cards?
There are two main types.
Open loop gift cards are like prepaid debit cards: they are issued by card companies like American Express, Visa, MasterCard, etc. and can be used at any retail location that accepts them. They usually charge an activation or usage fee.
Closed loop gift cards are issued by retailers like Macys, Starbucks, Pizza Hut, etc., and are only accepted by that retailer. They usually have no additional fees.
Do gift cards have a minimum or maximum amount?
Usually, the minimum is around $10 and the maximum is around $500.
But these can vary based on the specific retailer offering them.
What are some advantages of a gift card?
One big advantage of gift cards is that they are a very safe option for a gift. If you know that someone shops at a certain store frequently, a gift card from that store could make an excellent gift as the recipient can use it to buy what they want. This is better than you buying a gift and hoping they like it.
Gift cards are easily available and can be used for purchases both online and in stores. A gift card helps people limit overspending since there is only a limited amount of money on the card.
Also, closed loop gift cards generally have no fees so there is no additional cost to buying or using them.
Are there any disadvantages of gift cards?
Some open loop gift cards have fees for activation or usage, which means you have to spend more than the amount you plan to gift.
If you buy a certain retailer’s gift card, the money is locked-in and has to be spent at that store. If that store goes bankrupt or closes down, all gift cards of that store become worthless.
In addition, some gift cards have an expiry date – so if they are not used on time, the money is lost.