How to Use a Gift Card for Online Purchases

Gift cards have become a widely embraced payment method for online shopping, offering both convenience and flexibility for consumers. Understanding the specific characteristics of different gift cards is the initial step toward effectively utilizing them for online transactions.

Understanding Gift Card Types

Gift cards generally fall into two categories, each with distinct uses for online purchases. Open-loop gift cards are branded by major payment networks such as Visa, Mastercard, American Express, or Discover. These cards function much like standard debit or credit cards and can be used at any online retailer that accepts their respective payment network.

Conversely, closed-loop gift cards are issued directly by a specific retailer or brand. These cards are exclusively redeemable at the issuing store or its associated online platforms. While their use is restricted to a particular merchant, they can sometimes offer specific benefits or discounts tied to that brand.

Preparing Your Gift Card for Online Use

Some physical gift cards, particularly those purchased from a display, require activation before they can be used; this process often involves calling a toll-free number or visiting a website listed on the card. Following activation, it is advisable to check the card’s balance, typically accessible through a dedicated website or phone number found on the card.

For open-loop gift cards, an important step for online use is registering the card with your name and billing address, including your ZIP code, on the issuer’s website. This registration links the card to a specific address, which many online merchants require for address verification system (AVS) checks during checkout. Failing to register an address can lead to transaction declines, as the system may not be able to verify the cardholder’s details.

Completing Your Online Purchase

Navigate to the payment section of the online retailer’s website and input the gift card’s 16-digit card number, expiration date, and the three or four-digit security code (CVV) found on the back of the card. For open-loop cards, it is usually necessary to select “credit card” or “debit card” as the payment type, rather than “gift card.”

Many online retailers allow for flexibility when using gift cards. If your gift card balance does not cover the entire purchase amount, most websites offer the option to combine it with another payment method, such as a credit or debit card. Some retailers also permit the use of multiple gift cards for a single transaction, though this varies by merchant and their specific payment policies.

Addressing Common Issues

A common problem is an insufficient balance, which occurs if the purchase total exceeds the funds available on the card; this can result in a declined transaction or require an additional payment method. It is prudent to re-check the card’s balance before attempting the purchase again.

Another frequent issue is a card being declined due to an address mismatch, particularly with open-loop cards, if the billing address entered does not precisely match the one registered with the card issuer. Confirming that the card type is accepted by the merchant and ensuring proper address registration can resolve this. If technical glitches occur, such as payment processing errors, trying the transaction again, clearing your browser’s cache, or contacting the merchant’s customer support or the gift card issuer’s helpline can provide solutions.