How are gift cards categorized?

Gift cards are categorized primarily based on their acceptance at merchants, which refers to the type of establishments where they can be used for transactions. This categorization is crucial for both consumers and retailers, as it dictates which businesses will honor the gift card as a form of payment. Typically, gift cards can be either branded, where they are accepted only at specific stores or restaurants, or they can be general-purpose cards that are usable at a wide array of merchants.

While other categorizations might exist, such as physical design, promotional offers, or customer age requirements, these do not fundamentally influence how gift cards operate in terms of their acceptance at point-of-sale. The ability to use a gift card at certain locations is the primary concern for consumers when purchasing or receiving gift cards, making the classification based on merchant acceptance the most relevant and widely recognized. This ensures that the holder understands where they can actually utilize the card, which is essential for its value.