Gift Card Basics

Prepaid cards operate within either an “open” or “closed” loop system. It is an important distinction, as different compliance and reporting regulations apply to sellers of prepaid access, and different thresholds are in effect, abiding by which exempts the sellers from the requirements to collect purchasers’ data, file suspicious activity reports (SAR), and so on.

While the question may seem trivial, a nuanced answer may contain some important implications.

First of all, we are probably not discussing rectangular pieces of plastic as collectible items (yeah, it is a thing). Nor are we talking about paper gift certificates, usually signed by a business owner or authorized employee, but lacking any serial numbers.