A prepaid card is a means of exchange. When you purchase a card associated with a specific product or service, you know exactly what you will receive in exchange for the card. You cannot choose from among all the goods and services offered by the merchant.

For example, the card may be redeemed for:

  • a 60 minute massage in a health spa;
  • a one night stay at an inn;
  • a four-course meal at a restaurant;
  • a specific item of jewellery, created by a particular designer.

Cellular telephone calling cards also fall in the category of cards associated with specific goods or services.

Types and formats

There are several types of prepaid cards. They may take different forms: gift certificates, printable vouchers, electronic cards, etc. They may also be made of different materials: plastic, paper, cardboard, etc. They can use different technology: chips, magnetic strips, virtual accounts, etc.

Third party purchase

Prepaid cards redeemable for specific goods or services can be purchased from the merchant accepting these cards.

They may also be purchased on group purchasing Web sites or from third party merchants. In both of these situations, you are entering into 2 contracts:

  • a contract with the merchant selling the card;
  • a contract with the merchant providing the goods or services.

Free cards

Cards given away by merchants free of charge are not subject to the rules provided by the law. Cards received through reward programs, in exchange for points, for example, are also exempt from the rules. Only cards that you have paid for are covered by the law.

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Last update : November 14, 2022

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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.