Five things to know about gift cards
Looking for the perfect gift for your loved ones? A gift
card from a bank is a cool option because it lets the recipient buy the stuff
he or she wants. It is also a safe way to introduce youngsters to plastic.
1 What are gift cards?
Gift cards are a cool alternative to cash or gift vouchers
that tie recipients to a particular store and leave them with limited choices.
Several banks, including SBI, Central Bank of India, ICICI Bank, HDFC Bank,
Axis Bank and IDBI Bank offer these pre-paid cards. You can buy one over the
counter at designated branches of these banks. The card is activated as soon as
the bank receives the payment. The service providers are either MasterCard or
Visa. You don't have to be a customer of the bank to buy the card. However, it
helps if you have an account, otherwise you need to provide Know Your Customer
(KYC) documents such as address and identity proof. While KYC details of the
recipient are not required, you will have to mention his name, address and
contact details. Some banks like HDFC Bank and SBI allow personalization of the
card by letting you add the beneficiary's name on them.
2 How do they work?
Gift cards can be used at any establishment that accepts
plastic. Some gift cards like those issued by the Central Bank of India and
Axis Bank can be used for online shopping as well. These cards work just like
debit cards. Every time the user makes a purchase, the amount is deducted from
the balance. The card can be disposed of once the balance is exhausted. Some
cards such as the ones from Axis Bank come with four-digit PINs that allow them
to be used at ATMs to find out the balance amount. But you can't use them to
withdraw cash. Some banks even let you check the balance online. For most
others, however, the user must approach the call centre to know the balance in
the gift card.
3 What are the features?
A number of banks offer gift cards.
While some finer details may vary, the broad features remain
the same. The card can be loaded with any amount between Rs 500 and Rs 50,000
and the amount has to be exhausted within three years. Till recently, the
validity was one year. There is a card issuance fee of around Rs. 100, plus
taxes. HDFC Bank, for example, is offering a 50% discount on issuance fee till
31 December 2014. There is no transaction charge and the gift card can be used
for multiple transactions. But if you use another bank's ATM to know the
balance, there will be a transaction charge of about Rs. 8. Also, the user will
have to pay any surcharge applicable on the transaction. For instance, if you
use the card to buy petrol, you will have to bear the surcharge payable on such
transactions.
4 Can you get a refund?
Gift cards cannot be reloaded once the 4 balance is used up.
When the validity expires, even if there is some balance remaining in the card,
some banks may not allow the card to be used. For instance, Central Bank of
India's Cent Gift Card does not allow unused funds to be redeemed after the
validity expires. But some, like Axis Bank, do allow unused funds to be
withdrawn. But the original card purchaser (not the recipient) must take the
card to an Axis Bank branch where the bank will refund the balance (minimum Rs. 100) after deducting some charges. This refund can be claimed within three
months from the date of expiry of the card. If the card has a PIN and the
recipient forgets it, the original buyer will have to step in again. The bank
will give a new PIN, but only to the original buyer.
5 What to do if card is lost?
Like any another card, a gift card can be lost or stolen.
The first thing to do, therefore, is to inform the bank about it, so that the
card can be deactivated to prevent possible misuse. Some like the ICICI Bank
gift card comes with zero card liability once the loss of card has been
reported to the bank.
After this, the card holder will need to file a police
report and submit a copy of the FIR to the bank. The bank will then give the
original buyer the unused amount after subtracting charges, if any. Some banks
like ICICI Bank won’t refund the money but reissue a replacement card on
payment of Rs. 199. You might have to undergo the KYC procedures again for getting
a new card.
(Courtesy: Times of India)
