Incentive programs are a powerful tool for businesses to motivate and retain customers, and prepaid reward cards can be a great way to provide rewards to participants. However, not all prepaid reward cards are created equal, and it’s important to understand the differences between general purpose and loyalty prepaid reward cards in order to choose the right type of card for your program.

General-purpose prepaid reward cards, also known as open-loop cards, can be used anywhere that accepts credit cards. They function like traditional credit or debit cards, and can be used to purchase a wide variety of goods and services. These cards are often branded with Visa, Mastercard, or American Express and can be used at any merchant that accepts those networks.

Loyalty prepaid reward cards, also known as closed-loop cards, can only be used at specific merchants or within a specific network of merchants. These cards are usually branded with the name of the merchant or network and can only be used to make purchases at those locations. For example, a closed-loop card from a specific department store can only be used to make purchases at that store and cannot be used at other retailers.