What does the term “open-loop” relate to in the context of gift cards?

The term "open-loop" in the context of gift cards refers to cards that can be used anywhere that accepts the brand associated with the card, typically identified by a widely recognized payment network such as Visa, Mastercard, or American Express. This means that consumers can use these gift cards at a variety of retailers and businesses, not limited to a single store or brand.

Open-loop gift cards often offer flexibility and convenience, as they can be used for both in-store and online purchases across a broad range of locations. This characteristic distinguishes open-loop cards from closed-loop cards, which are restricted to use at specific stores or within certain merchant groups. The ability to use an open-loop card wherever the brand is accepted provides a more versatile option for cardholders, enabling them to choose from various merchants and services.