December 14, 2009

Gift Cards: Tips for Consumers

By Karen Saley, Extension Specialist, Pinellas County Extension

Gift cards have become and easy and convenient way of gift giving and like many of us you are probably going to be picking up a few during the holiday season. As convenient as gift cards are they do have their drawbacks. Here are a few things you should be aware of before deciding to purchase a gift card.

FEES: Some gift cards may not have fees, but others do charge various types and amounts of fees. Some fees may be paid in cash, but most often fees are simply deducted from the value on the card. These fees may include:
· Purchase Fees that are charged when you buy a gift card. These are in addition to the money you pay in exchange for the value on the card.

· Monthly Fees or other regular charges (such as service fees, administrative fees, or maintenance fees) that are deducted from the gift card balance.

· Inactivity Fees that apply if you do not use the card within a certain time period (for example, a monthly fee that is deducted from the gift card balance if the card’s value has not been used up within 6 months after the card is purchased).

· Transaction Fees for using the card – either for all transactions, for a high number of transactions, or for certain types of transactions (for example, ATM withdrawals).

· Miscellaneous Fees for balance inquiries, replacing a lost or stolen card, or other services related to the card.
EXPIRATION DATES: Check to see if the card has an expiration date. If a gift card expires before you use it, you will most likely loose it. If there is an expiration date, you should find out if a new card can be issued to you and if there are any fees for issuing a new card.

LOST OR STOLEN CARDS: If a card is lost or stolen you will want to know if you can get a replacement card and if there is a fee for doing so. You will also want to find out if someone else uses the card after it is lost or stolen, would that money be credited to the replacement card. Always keep the receipt for the gift card purchase, and record the card number in case you or the person who received the card as a gift needs a replacement card.

WHERE YOU CAN USE THE CARD: A store gift card can only be used at the designated store or sometimes at stores under a parent company. VISA® or MasterCard® gift cards can be used at many locations around the world. Some gift cards can even be used to get cash at an ATM.

TRUST: Remember that a gift card is only as good as the store or institution providing it. You are trusting that the company is financially stable and will honor the card whenever it is presented. Before purchasing a gift card you may want to make sure the company is not be being sold or going into bankruptcy.

PROBLEMS AND COMPLAINTS: If you experience a problem with your gift card you want to know it will be taken care of. Check for a toll-free number to reach a customer service representative that can help you with your problem.

LAST BUT NOT LEAST: When giving someone a gift card, be sure to pass along all this information to the recipient so they understand all the conditions that go along with the card.

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