The term “gift card” is a pretty generic one. There are quite a few other names used for sub-categories and classifications of different types of gift cards by industry insiders.

Open-Loop: An open-loop gift card is one that can be used in more than one store. Open-loop gift cards belong to one of the major networks; Visa, MasterCard, American Express, and Discover.

Closed-Loop: This is any card that can be used in one store or chain of stores only. For instance, Target, Home Depot, or Starbucks

Stored-Value: The strict definition of a stored-value card is a plastic card encoded with monetary value on a magnetic stripe. In addition to open-loop and closed-loop gift cards, prepaid phone cards, payroll cards, and transit cards also fall into this category. For most pracitical purposed, these days, money isn’t stored directly on the card, but in a database somewhere. It is very hard to tell whether there is any subtle differentiation between the meaning of stored-value and prepaid these days.

Prepaid: Here is a definition I found from the Federal Reserve (here): The term prepaid was associated with products for which the prefunded value is recorded on a remote database, which must be accessed for payment authorization. So defined, the term prepaid describes most of the products on the market today. There are a variety of applications for prepaid cards, including gift cards, payroll cards, flexible spending account cards, government benefit cards (such as food stamps), insurance claim cards, employee reward cards, travel cards, remittance payment cards, and transportation cards. Most prepaid cards serve a single purpose, but there are a few cases in which multiple prepaid functions are combined on one card. In addition, some cards, such as payroll cards, government benefit cards, and transportation cards, can be reloaded with value, while other cards, such as travel cards, insurance claim cards, and most gift cards, cannot.

Debit card: All of the open-loop cards issuers classify their cards as debit cards (they say DEBIT on them). When you do a transaction, it performs a debit from an account that has money in it. The difference between gift debit cards and bank debit cards that also hav a Visa or Mastercard logo is that gift debit cards (as far as I know) do not required you to enter a PIN when you use them. Actually, this is part of the problem with open-loop gift cards; despite their popularity with consumers, many merchants seem to be clueless as to how to run them. I’ve often been asked to provide a PIN when using a Visa gift card when none exists.