Gigt Cards

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)