Gift Cards vs. Prepaid Debit Cards: Pros and Cons

Emily Patz
Emily Patz
Posted November 6, 2018 in Consumer Incentives

A gift is meant to bring someone happiness, show appreciation, or mark a celebratory moment, and both gift cards and prepaid debit cards can do the trick.

That being said, there are differences between the two that may make your decision a little easier. Check out this list of pros and cons to see if a gift card or a prepaid debit card is the right choice for your next gift.

Prepaid Debit Cards Offer A Lot of Flexibility

Prepaid debit cards from Visa or American Express can be redeemed almost anywhere, giving the recipient the ability to purchase whatever they please. This makes prepaid debit cards a very convenient choice, especially if you’re unsure of your recipients’ interests.

Gift Cards Can Be Limiting (Depending on What You Buy)

Because gift cards can only be redeemed at the retailer associated with the card, they can be hit or miss when it comes to delighting the recipient. In situations where you’re gifting someone who you don’t know very well, finding the perfect gift card can be tricky. There is a way around the guessing game of gift cards. You can opt for customizable gift cards that enable the recipient to cash in at their choice out of a long list of retailers.

Giftogram in wallet 

Both Can Be Purchased in Bulk for Anytime Occasions

When you give a gift, you want the recipient to receive the whole gift. Many prepaid debit card providers like Visa and American Express charge a transaction fee of $3.95 every time the card is used. If the recipient plans to use the card for several price pointed purchases, they could unknowingly whittle down the intended gift amount very quickly and many times unexpectedly. The per-purchase fee isn’t clearly stated, so it’s good to give the recipient a heads-up that they should consider reserving their pre-debit card for larger, less frequent purchases.

Prepaid Debit Cards Charge a Fee for Every Purchase

Scarcity motivates action. Exclusivity implies value. Pair these two factors and you’ve got yourself a lightning rod of a perk. Here’s how to launch a sellout sale, engage and delight current members, and gain new members at the same time: Round up a limited line of products or services that are only accessible to members of your loyalty program. Next, send out an email blast to both members and non-members. The email blast should emphasize that the sale is members only and include call to actions to visit the sale and to become a member.

Gift Cards Carry a Personal Touch

Typically redeemable at a particular retailer and complemented by a design that’s fit for the occasion, gift cards are often perceived as more thoughtful than prepaid debit cards. If you’re welcoming a new employee, celebrating a birthday, or saying thanks to a loyal customer, it pays to opt for a gift card that allows for personalization.


Custom Giftogram CardsPrepaid Debit Cards Charge Monthly Fees

For the duration of the time a prepaid debit card is activated, it will incur a small monthly fee anywhere from $2.00-$7.00 depending upon the provider. While this fee isn’t as aggressive as the per-purchase fee, the fees combined can make a sizeable dent in the amount that you designated for a gift.  

Gift Cards Require the Recipient to Shop

Believe it or not, some people loathe shopping. To this crowd, a gift card comes off as a chore. The good news is, you can avoid giving someone a gift card that makes them cringe at the thought of stepping into a store. Before you purchase, check to see if the gift card is redeemable online as well as at a brick and mortar location.

Prepaid Debit Cards Have Their Limits, Too

While prepaid debit cards can be cashed in at a plethora of places, there are instances where they won’t fly. For example, American Express gift cards are only accepted by businesses who take American Express, and some businesses who accepts Visa cards will not accept Visa debit cards. They are also not redeemable at casinos, ATMs, or for use on recurring bills. There are additional instances where prepaid debit cards are a no-go and restrictions vary from card to card, so be sure to read up on the fine print before you buy.

Gift Cards Often Handle Gift Wrapping for You

Gift cards accompanied by fun and festive designs do the work for you when it comes to thoughtful presentation. Considering the extra cost of gift wrap and greeting cards, this pro is worth a good penny.

 Giftogram in a pocket

Still Trying to Decide?

Giftogram offers the flexibility of prepaid debit cards with the personalization of traditional gift cards. Find out if Giftogram’s gift cards can save you time and hassle by talking with a member of our team. Give us a call at (973) 887-1600 or request a demo to see our user-friendly gift card personalization platform in action.