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Home Balance Check Why This Resource Types of Gift Cards Using Gift Cards Online Contact Us
Card Formats

Types of gift cards in the US

Not all gift cards are the same. The type of card you have determines where you can use it, what fees may apply, and which regulations govern it — including Gift Card Mall MyGift cards.

Open-Loop Gift Cards

Open-loop cards carry a Visa, Mastercard, American Express, or Discover logo. They work anywhere those payment networks are accepted, which is most merchants in the US and many internationally. Gift Card Mall MyGift prepaid Visa and Mastercard cards are a common example.

How they work

These cards are issued by banks and processed through major payment networks. When you use one, the transaction goes through the same infrastructure as a regular debit card. The card has a fixed dollar amount loaded at purchase.

Fees to know about

  • Purchase fee (typically charged at activation, often $3–$7)
  • Inactivity fee after 12 months of no use
  • ATM withdrawal fee if applicable
  • Replacement card fee if lost (varies by issuer)

Who regulates them

Open-loop prepaid gift cards are regulated by the Consumer Financial Protection Bureau (CFPB) under both the CARD Act and the Electronic Fund Transfer Act. They receive strong federal consumer protections.

Closed-Loop Gift Cards

Closed-loop cards are issued by a specific retailer, restaurant, or service provider. They can only be used at that merchant's locations or website. These are the most common type of gift card in the US.

How they work

The card's value is stored in the retailer's own system. When used, the merchant deducts the amount from the card's balance internally. No payment network is involved, which keeps costs lower for the retailer.

Fees to know about

  • Most retail gift cards have no purchase fee
  • Inactivity fees apply after 12 months (CARD Act compliant)
  • Replacement fees vary widely by retailer

Who regulates them

Closed-loop retail gift cards are covered by the gift card provisions of the CARD Act. The Federal Trade Commission (FTC) also has oversight authority over unfair or deceptive practices by retailers.

Digital Format

Virtual and digital gift cards

Virtual gift cards exist only as a code, email, or digital file. They're increasingly common because they can be delivered instantly and don't require physical production or shipping.

From a regulatory standpoint, virtual gift cards receive the same protections as physical cards under the CARD Act. The five-year fund validity rule and inactivity fee restrictions apply equally.

One practical difference: there's no physical card to lose. But you can still lose access to the code if you delete the email or the issuing platform goes out of business. Keep records of virtual card codes in a safe place.

Save the original email in a dedicated folder
Screenshot or copy the card number and PIN
Note the purchase date for future reference
Keep the purchase receipt as backup documentation
Smartphone displaying a digital gift card code — virtual gift card on screen
Quick Reference

Side-by-side comparison

Feature Open-Loop Closed-Loop Virtual
Where usable Anywhere network accepted Specific retailer only Online or in-app
Purchase fee Usually yes ($3–$7) Usually no Varies
Inactivity fee After 12 months After 12 months After 12 months
Fund expiry minimum 5 years (CARD Act) 5 years (CARD Act) 5 years (CARD Act)
Physical card Yes Yes No
Gift card balance check Online, phone, ATM Online, phone, in-store Online, email
Replacement if lost Possible with receipt Varies by retailer Check email records

Want to know how to use gift cards for online purchases?

Online redemption has its own set of quirks and common issues. We cover them in detail.

Online Usage Guide Balance Check Guide