Working for GiftCards.com, we often take for granted that everyone knows what a gift code (also known as an eGift, virtual gift, or digital gift card) is and how to use one? However, if you were to ask the general public what a gift code is, you would probably get a plethora of different answers and even a few blank stares. The fact is that as it stands today, the average consumer probably does not have a very clear understanding of the term gift code or how to use an eGift. Well, let’s clear this up right now.
A gift code is a term of art used in the prepaid card industry to refer to the unique number associated with a prepaid gift account (typically around 16-digits). Traditionally, this account number appears on the front of a plastic prepaid gift card. With a virtual gift, you receive just the number (without a plastic card) usually in an email or downloaded directly from the prepaid gift card provider. Just like with gift cards, there are generally two types of codes: 1) a network branded version meaning those issued by a bank for Visa, MasterCard, Discover, or American Express, or 2) a closed loop version that is only good at specific merchants such as a Best Buy gift code.
When a gift recipient receives a network branded eGift such as a Virtual Visa account, they would use the code to make online purchases of goods and services by simply entering the 16-digit number in the same manner as you would enter a credit card number. For the closed-loop version, the merchant will typically have a field in their shopping cart to enter a gift card or code and deduct the gift amount from your shopping carts total.
What is interesting about the closed loop version is that consumers can find free apps for their smart phones convert the merchant code number into a bar code so they can use their phone to pay in the retail store.
Virtual gifts are attractive because of the speed of delivery. Thus, for the gift giver who has waited until the very last minute to give a gift, a code can be delivered instantaneously to the recipient via email versus having to deliver a gift card to them in the mail.
At GiftCards.com, we sell a Virtual Visa product and most of our merchant Discount Gift Cards are also available in digital form. As the world continues to move towards doing everything on their mobile devices, we anticipate these electronic gifts to take over traditional gift cards just as plastic replaced the gift certificates at the turn of the century.
~~ Ray Bilbao, former Legal Counsel for GiftCards.com