Closed-Loop, Semi-Closed & Marketplace Gift Cards: What's the Difference?

When you browse gift cards, you'll notice some work in only one store while others seem to work almost everywhere. That difference comes down to how the card is designed. Knowing the types helps you pick a gift that's both thoughtful and genuinely usable.

1. Closed-loop gift cards

A closed-loop card can only be spent with the brand that issues it — its stores, website or app.

Examples: a card for a specific fashion label, restaurant chain or jewellery brand.

Best for:

• People with a clear favourite brand
• Experiences (a particular hotel or restaurant)
• Gifts that should feel specific and intentional

Watch out for: store-only usage, single-use rules and brand-specific exclusions.

2. Semi-closed or multi-brand gift cards

A semi-closed card works across a defined group of merchants. In India, these are regulated as prepaid payment instruments by the RBI, and are typically issued by banks or authorised non-bank issuers.

Examples: group retail cards that work across a family of brands, or wallet-style vouchers accepted at participating merchants.

Best for:

• Recipients whose favourite store you don't know
• Corporate rewards where choice matters

3. Marketplace vouchers

Marketplace vouchers work across a large e-commerce platform with thousands of sellers and categories.

Examples: Amazon, Flipkart, Myntra, AJIO and Tata CLiQ cards.

Best for: almost anyone — they're the safest gift when in doubt.

Watch out for: exclusions such as buying other gift cards or specific digital services.

4. Open-loop cards (a quick note)

Open-loop prepaid cards run on card networks and can be used almost anywhere cards are accepted. These are bank-issued products with KYC requirements and aren't what most people mean by "brand gift cards". SaverPe focuses on brand, marketplace and experience e-gift cards.

Comparison table

How to choose

• You know their favourite brand? Go closed-loop — it shows you listened.
• You know their interest but not the store? Choose a category leader, like a food delivery app for foodies.
• You know very little? Pick a marketplace voucher.
• Gifting 50+ people at work? Offer multiple brands so everyone chooses — see Orbit by SaverPe.

Real-life scenarios

Scenario 1 — the coffee devotee. Your colleague lives on cappuccinos and visits the same café chain every day. A closed-loop café card is perfect: it will be used within weeks and feels personal.

Scenario 2 — the new neighbour. You know very little about their preferences. A marketplace card works best because they can buy anything from groceries to home decor.

Scenario 3 — a 500-person festive gift. Employees have diverse tastes. Offering a menu of brands — marketplace, food, fashion, electronics — gives everyone a relevant choice.

Things to check for each type

Closed-loop

• Are there stores or delivery in the recipient's city?
• Is partial redemption allowed?
• Are there exclusions like sale items?

Multi-brand or semi-closed

• Which merchants are included today?
• Are there usage limits or KYC requirements?
• How is balance checked?

Marketplace

• Which categories are excluded?
• Does the card need to be added to an account?
• Can it be used with other payment methods?

Why the distinction matters for businesses

Companies choosing gift cards for employees or partners often mix types: a marketplace option for flexibility, plus popular single-brand options for personal appeal. This balance keeps redemption rates high — a gift card only creates value when it's actually used.

Key takeaways

• Closed-loop cards work only with one brand and feel most personal.
• Semi-closed or multi-brand cards work across a merchant network.
• Marketplace vouchers work across huge catalogs and suit almost anyone.
• Pick the type based on how well you know the recipient's preferences.