Granted, there are times when trying to decide on the perfect gift for a relative or one of your friends can be a monumental challenge. Of course, sometimes what may first appear to be the easy answer may be more complex than we realize.
This is especially true in the case of what is probably the most popular ‘easy answer’ out there - gift cards.
This year, industry analysts predict that gift cards will reach a record $25 billion in sales, with 7 of 10 consumers purchasing at least one of these retail darlings, making the odds pretty good that even if you don’t buy a gift card you most likely will receive one.
Not surprisingly, like most things involving money and finances, there are a few things you should know about gift cards, regardless of whether you’re doing the giving or receiving to make sure you get your money’s worth.
For example, gift cards, depending on the issuer, can be used in a variety of ways. Some can be used only at a specific store while others can only be used on-line. Don’t assume that the gift card you purchase on a retailer’s website can be used at the local store in the mall. You and the recipient of your gift may be disappointed.
Banks and credit card issuers like Visa, MasterCard, Discover and American Express sell what are known as open loop gift cards. These cards can be generally used anywhere the ‘brands’ selling them are accepted. However, many of these types of gift cards have expiration dates (date after which the gift card is no longer good for use), and a variety of fees such as purchase or maintenance fees.
A purchase fee is the fee charged to the gift card purchaser before the card is loaded (process of activating the gift card and assigning a specific dollar value or limit for spending) with funds for the recipient. Maintenance fees include fees deducted from the value of the gift card if the consumer does not make use of the card within a specific period of time.
Obviously, just like any other ‘plastic money’ you need to know the terms of the deal, as well as, which deal is more suitable to the intended recipient. (See what an easy answer this is?)
To help with this dilemma, both The Wall Street Journal on Line and Bankrate provide information that profiles a number of bank, credit card company and retailer’s gift card terms and policies including purchase fees, maintenance fees and replaceability. Reviewing this information may help in making the easy answer actually easy and also the most suitable answer to your gift giving needs.
You might also want to investigate the laws in your state as a number states have recently passed legislation in regards to what terms gift cards may carry.
But don’t think that’s the end of it. Oh no!
Again, like so many things dealing with money and finances, scammers and con artists have figured out some surprising ways to relieve you and the recipient of your gift with little or no value in your gift card.
Most of us have seen the pretty displays of gift cards in stores. Instead of just one "look" to a gift card, many options in colors and pictures on the front allow you to individualize the card to your heart’s content. It also allows scammers to copy numbers and PIN codes from the cards on these displays. Then, as a shopper purchases the gift card and the cashier activates it, the scammer calls the available 800 number checking for balances and bingo! the scammer goes shopping, leaving you and the intended gift card recipient with a worthless card.
Consumer advocates suggest asking the cashier for a gift card that hasn’t been hanging out in the open. Lacking that option it is suggested that you check the back of the card to be sure the PIN code hasn’t been exposed, as well as checking that the bar code on the card matches your receipt. Another bit of advice if you are purchasing a gift card that is out on display with a specific preprinted dollar amount is to have the cashier swipe the card to verify the dollar amount has not been plundered.
Good luck and good gifting!
