Which Gift Cards Charge Activation Fees?


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You should not pay tax when you purchase a gift card. Gift cards are not considered a taxable good. If you buy taxable goods with a gift card, then tax is paid in that transaction, but gift cards themselves should not be taxed. On occasion, however, cashiers will tax gift cards on accident. Keep that in mind! Make sure to look at the bill to ensure there is no tax on the gift card. 

This article will cover everything you need to know about gift card fees. Tax is one, but prepaid gift cards have additional fees to keep in mind when purchasing those cards. We will also discuss the perfect times to purchase gift cards and how gift cards help businesses. Let’s get to it! 

Everything You Need to Know About Gift Card Fees

The majority of gift cards do not have gift card fees, and you do not pay tax on gift cards. This is great news! It means that most of the time, you can add, for instance, a $25 gift card to your cart and pay exactly $25 for it. 

The notable gift cards that have fees are prepaid Visa and Mastercard gift cards. These powerful prepaid gift cards are redeemable at any store throughout the country. The downside to these cards is the activation and inactivity fees. 

Visa and Mastercard Gift Cards

Prepaid gift cards have an activation fee that you, as the purchaser, should pay for. This is usually only a few dollars, but it does add up if you buy a lot. On top of the activation fee, both cards have dormancy fees that kick in after one year of inactivity. This rarely comes into play, as most people who have had a prepaid gift card for over a year have misplaced it or aren’t going to use it. 

The flexibility of Mastercard and Visa gift cards is what makes them such an amazing gift. If you have a friend or family member and are struggling to pick out a gift card for them, a Visa card can come in handy as they can spend it wherever they wish! The activation fee is only a few dollars, so while it is less efficient than giving them a retailer gift card, you do get to deliver an amazing gift that you know they will enjoy. You can use them in any store that accepts Visa or Mastercards, which is just about every store. You can check your balance whenever you need to and use whatever remains on the card to split a purchase, as long as you have another payment method on hand. 

One downside to these cards is that you cannot reload funds onto them, meaning you have to keep purchasing new cards (and pay the fees) if you use these every month. There is a different card called a Prepaid Mastercard, which lets you load money as you desire. The prepaid card is excellent for budgeting purposes, but prepaid gift cards are superior gifts. 

Gift Cards for Retailers

You do not pay tax on gift cards for specific retailers, and there are no fees associated with their purchase! Retailer gift cards are excellent ways to give fun gifts to friends while evading the stress of picking out a specific gift for the celebration. Gift-giving is hard! There are always people who seem to have everything they need, but a retailer gift card is always welcome! 

When to Buy Gift Cards

Gift cards make wonderful gifts, and you can purchase them for yourself as well! They are excellent reminders to enjoy the goods or services from a particular location. In this section, we will cover the perfect time to purchase gift cards for yourself and when to purchase them for friends and family! 

When to Gift a Gift Card

Gift cards are versatile gifts that are usable in almost any situation. A monetary gift goes a long way for many who might not need specific items, especially Visa and Mastercard gift cards, which can be spent doing something fun or on something practical like groceries or gas. 

The holidays, for instance, are an unfortunate cause of stress for many people because of how hard it is to create a budget when considering all the gifts they need to purchase. If you give a gift card, it helps them alleviate the strain on their budget at the end of the year and lets them stay in a merry and festive mood!

Best Places to Buy a Gift Card

Gift cards are fantastic gifts, but it can be hard to narrow down the many options to pick out the right one for friends and family! In this section, we will outline some classic categories of gift cards to help you cultivate a list of retailers as you search for the perfect gift. 

A Gourmet Home-Cooked Meal

We will start this list off with a classic. Food! Buying a food-related gift card is a great way to spend it on something special. Cooks appreciate this category, and it is about giving them a little extra money on their grocery bill to go all out on their next grocery run. There are recipes out there that sound phenomenal, but a combination of ingredient cost and prep time take them out of the running for a normal week’s meal. The arrival of this gift card signals the time for a fun and exciting week of grocery shopping. 

If the recipient is not a cook, but you want to go the food route, this gift card could go towards snacks! You can get a gift card to their local grocery store or a Visa prepaid card. They have tons of options when it comes to finding the perfect place to pick up some snacks and treats. 

Next to this is, of course, restaurants! Going out to eat, perhaps to the Cheesecake Factory, is a common and fun pastime, and you can recommend a new restaurant or get them a gift card for one of their favorites. 

Clothes Shopping

Clothes are expensive. Clothes shopping can quickly turn into a chore whenever you need something new, made doubly worse if an old staple either gets ruined or gets a bit too well-worn to justify wearing it more. A gift card to Old Navy, Banana Republic, or a similar store is a great way to send some morale support as they get some new gear. If you aren’t sure about their favorite place, a Visa gift card works at every single one of those stores. Sometimes, you need to shop around at a few different places before finding the right item. 

The flexibility of a prepaid Visa gift card is second to none. Since Visa gift cards work anywhere, you can rest easy knowing that you can shop to your heart’s content at any place you desire and pick out some nice items there. 


Going out for drinks with friends (alcoholic or non-alcoholic) gets expensive pretty quickly. People who go to Starbucks every day spend around $20 a week. That expense adds up. Because of this expense, there are a lot of people who shy away from exciting coffee drinks at local cafes. 

A gift card for a cafe is a great way to enjoy a special treat alone or with friends. We love gift cards for something slightly unusual that makes any day special. This also applies to going out for a drink with friends on the weekends or after work. Happy hour drinks are even happier when you use a gift card on them. 

Are Gift Cards Good for Businesses? 

Yes! Although we wouldn’t blame you for not thinking of gift cards beyond a simple gift. Gift cards help businesses count on expenses, as they are expenses now with the promise of a future purchase. And, alas, there are a lot of gift cards purchased that never get spent. People misplace or forget about the cards, which, while unfortunate for the customer, is great for the business. 

Corporations and retailers generate a lot of profit from gift card purchases, and gift cards can be just as important for the success of small businesses as well. It’s easy to go with big-name brands by default when shopping for gift cards, but local small businesses benefit much more with gift card purchases, as it helps them figure out earnings and revenue in advance. This section will break down how gift cards help businesses and why they are great gifts for friends and family! 

They Generate Revenue 

All companies must generate revenue to continue long-term operations. Offering gift cards is an excellent way for businesses to generate additional revenue, as customers can purchase gift cards to give as gifts or spend themselves.  

Draw in New Customers

Growing a customer base is an incredibly challenging task. Gift cards provide a wonderful way to get the word out about your business and draw in new customers. Gift cards of any amount gifted to friends and family provide a great incentive for them to try out the new place. 

Increase Brand Loyalty 

Purchasing gift cards are often a sign that the customer really likes the business. When they purchase a gift card, it means they like it a lot — enough to send someone else in! Since most gift cards are locked to specific retailers, a gift card purchase guarantees more sales in the future, which is something all businesses love to see. 

Repeat customers are integral parts of running a successful business. Returning customers make up a majority of sales for many businesses, and it is more expensive to attract a brand-new customer than it is to keep a preexisting one. A gift card reward can be just the thing to make customers feel appreciated while increasing sales at a business. 

All You Need to Know About Gift Card Fees

We hope this article has answered all your questions about gift card fees! To sum it up, gift cards to retailers do not have fees, and you do not pay tax on gift cards. Prepaid Visa and Mastercard gift cards, however, have an activation fee that comes along with the card, which you should pay before you gift it to friends and family! 

This article originally appeared on giftcardgranny.com and was syndicated by MediaFeed.org.

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8 Gifts Cards That Are Way Better Gifts Than Cash

8 Gifts Cards That Are Way Better Gifts Than Cash

When it comes to giving someone you know a gift, whether it be out of the colossal kindness inside of your heart or because of a celebratory occasion like a birthday or graduation ceremony, it generally pays off to let them pick out their own present. That’s why straight cash has been a long-time favorite of gift recipients everywhere; even young children understand the value of money and are usually excited to receive it as a gift, so long as their parents let them spend it on something they want. 

In conjunction with receiving cash to commemorate special events and in recognition of achieving impressive accomplishments, many folks receive gift cards as an alternative, somewhat more formal way of gifting money. Gift cards don’t entail any specific item or product, but they do give the recipient access to merchandise, services, and related amenities from specific brands and retailers. This can be a great gift when you know the kind of retailers the person you are buying for frequently shops at, since it allows you to avoid making any major decision regarding gift-giving outside of choosing the gift card itself. 

If you aren’t sure what stores someone prefers, then you may want to avoid giving them a gift card that locks them into shopping at a particular retailer. In this scenario it may be better to go with a cash gift that can be used any way they please, though there are gift card options such as Visa or Mastercard gift cards that can be used for purchases at a variety of different retailers. 

There’s a lot to like about gift cards and, in terms of gift-giving, the presentation of a gift card is much more pleasant than cash. Gift cards make paying for things way more convenient and saves you room in your wallet, sparing you from the pain of too many dollar bills jumbled up inside. It’s rather embarrassing to be digging around in your wallet for money while you hold up the checkout line; pay quickly and hassle-free with a gift card!

Related: Unlocking the Magic: How Gift Cards Breathe New Life into Gifting Traditions

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For when you want to eat restaurant-grade food without leaving the house

Get food delivered on-demand right to your front door when you use DoorDash for all of your mobile ordering needs. This food delivery service is one of many that has changed the way we dine out (or rather, dine in) at our favorite restaurants and eating establishments. 

Many of us live for the full restaurant experience – being waited on by an attentive server, snacking on delicious appetizers, and relishing in the laid-back ambiance of casual dining. However, sometimes we simply want to dine on high-quality restaurant fare without having to leave the house and deal with other people, traffic, wait times, and all that jazz. DoorDash allows customers to bypass the bad stuff and enjoy great cuisine from the comfort of your living room couch. Choose from local food joints in your area and order a variety of tasty dishes from all kinds of different cultures including Mexican, Indian, Chinese, Greek, and much more. 

Pick up a DoorDash gift card and earn cash back! 


Shop hot designs for fashion-forward young men and women 

New clothes are always a gift to be excited over, but when you don’t know someone’s size or fashion preferences there’s a lot of room for error. That’s why a gift card to a clothing retailer is much better than gifting new apparel on its own, and Rue21 certainly has an impressive legion of fashionable finds to transform your wardrobe into a dimension of style. 

Rue21 serves as one of the leading fast-fashion brands in the nation, operating more than six hundred stores to deliver you the latest fashion trends without the hefty price tag. Fresh, affordable new trends are Rue21’s speciality; from new jeans you can wear everyday to go-to graphic tees, fabulous footwear, smart dresses, and an army of must-have accessories and beauty products, you can shop and stock up on all of your favorite finds for the season. 

Earn cash back on a Rue21 gift card!


Enhance the style of your space with timeless furnishings 

Having a home to decorate and furnish is definitely something to be grateful for, but the cost of household necessities can put a huge dent in your bank account before long. A gift card to Pottery Barn can make all the difference for folks who want to add a little lavish pizzazz to their household. 

Pottery Barn is an upscale home furnishing retailer that provides furniture, bedding, bath, rugs, decor, window accessories, drinkware, and more. Their collections are inspired by the seasons, such as floral-print bedsheets in anticipation of spring, setting your household up just in time for the changing weather. Pottery Barn also provides design resources with a lookbook featuring styles for the season, along with bedding looks, pillow pairings, and table settings. 

There’s a lot to be smitten with at Pottery Barn, from the expertly crafted furniture pieces to timeless and long-lasting decor. Be sure to pick up a Pottery Barn gift card so you can save with cash back. 

Related: Treat Yourself With These Gift Card Ideas


Fill up on the best handcrafted cuisine this side of the Mason-Dixon line

Give the gift of a delicious night out at one of the most loved steakhouse chains in the country with a Texas Roadhouse gift card. Serving American fare with a Southwestern spin amidst a dining environment filled with Texas-themed decor, this legendary steak restaurant is always serving something to write home about. 

Texas Roadhouse is celebrated for its premium hand-cut steaks and mouthwatering tender ribs, which are enough to make any carnivore drool. In addition to made-from-scratch sides like buttery mashed potatoes and fresh-baked rolls served with sweet cinnamon butter, Texas Roadhouse offers an impressive selection of strong cocktails and margaritas to enhance your evening out. To top it all off, the portions at Texas Roadhouse are large and in charge so you’ll always get more bang for your buck. 

Score cash back on a Texas Roadhouse gift card


For the beauty connoisseurs and fearless creatives looking to make a mark

Makeup opens up many doorways for folks to express themselves and experiment with the countless possible looks out there. Whether it’s time to prep for prom or because you simply want to touch up your appearance before going out with some friends, having the right makeup on hand can make all the difference. 

Shop all of the cosmetics brands you love at Sephora, your multinational retailer of personal care and beauty products. Sephora carries over three hundred beloved brands along with their own private label, Sephora Collection. Some of the beauty products sold at your local Sephora include products for skincare, cosmetics, body, fragrance, nail color, lotions, haircare, and beauty tools. Browse stunning eyeshadow palettes, makeup blenders, nail polish, perfume and cologne, face oils, foundation, shower gel, exfoliants and scrubs, dry shampoo, and many more must-have items. 

Give the everlasting gift of beauty with a Sephora gift card and earn easy cash back!


Create something wonderful after you shop at this retailer 

This specialty retail company provides everything under the sun for crafts and personal projects. Joann Fabrics carries one of the largest selections of fabric of any retailer, including fabric for apparel, flannel, fleece, and cotton. All of their fabric can be cut by the yard or may be purchased pre-cut to suit the needs of your project. 

For folks not looking for fabric, Joann offers a lot more in terms of crafting materials and artistic supplies. They have sewing supplies, home decor, storage accessories, yarn, knitting and crochet supplies, embroidery and cross stitch materials, paper crafts, bakeware, art kits, and so much more lining the shelves of their stores. Any creative-minded individual with a passion for making what they love is sure to love stocking up on everything Joann Fabrics has to offer. 

Pick up a gift card to Joann Fabrics for an easy way to earn cash back!


Browse thousands of titles for modern and classic video games

Need a gift card for a major video game retailer? GameStop operates thousands of locations across the country and exists as the world’s largest retailer for video games and top trade-in destination for Xbox, Playstation, and Nintendo games, consoles, systems, and accessories. 

The average GameStop location has a massive inventory of games for a range of video game systems. You can find many titles for the PS5, PS4, Xbox Series X, Switch, and older consoles available at your local GameStop. Games can be purchased new or used, which can end up saving you a fair bit of money. GameStop also sells other consumer electronics and loads of pop culture merchandise, typically from franchises popular in the video game industry. It’s a great place for both serious gamers and casual enjoyers to indulge in their shared love of video games. 

Earn cash back when you buy a GameStop gift card


Shop at any retailer you want with this versatile gift card

A Visa gift card can be used at many different retailers to purchase a variety of things. It is not bound by brand or location, which is true of most retail gift cards. Whether you want to eat out at your favorite restaurant, shop a local boutique for fashionable finds, or spend an evening at the movie theater with your friends, a Visa gift card can help you purchase it all. 

Pick up a Visa gift card!

This article originally appeared on GiftCardGranny.com and was syndicated by MediaFeed.org.



Featured Image Credit: PeopleImages/istockphoto.


Trae Bodge

Trae Bodge is an accomplished lifestyle journalist and TV commentator who specializes in smart shopping, personal finance, parenting, and retail. Trae has been named a Top Voice in Retail by LinkedIn and a top personal finance expert by GoBankingRates and Flexjobs. She is a contributor at Millie Magazine and CNN Underscored, and her writing and expert commentary have appeared in Newsweek, Woman's Day, Forbes, USNews.com, Kiplinger, Marketwatch, MSN.com, Yahoo Finance and numerous others. She has also appeared on TV hundreds of times; including Good Morning America's GMA3: What You Need to Know, NBC Nightly News with Lester Holt, Inside Edition, CNBC and local network affiliates nationwide.