Gift Card Trouble

Sometimes finding “just the right gift” just doesn’t happen, so off we go to
buy a gift card. Unfortunately these are often not the right gift either.

According to the National Retail Federation’s 2011 Holiday Consumer
Intentions and Actions survey holiday shoppers are expected to spend
around $150 on gift cards. For this 2011 season alone that equates to about
$27.8 billion in sales. WOW!

Unfortunately, for one reason or another, this last year the industry figures
tell us approximately $8 billion will probably be unredeemed “money in your
pocket”. In fact, a quarter of gift card recipients won’t have spent them a
year from now.

Gift cards fall into the category of a stored value card. Stored value cards are
also like telephone cards, pre-paid debit cards, government benefit cards
(like the Horizon card), or any other pre-loaded card.

Gift cards come with all kinds of conditions, and they should NOT be thought
of simply as “money in your pocket”. Consider these points when you are
purchasing and redeeming gift cards.

TIPS TO HELP

Know the Difference Between Retail and Bank Issued Cards

· Retail gift cards no longer have fees or expiration dates associated with
their gift cards—making sure by checking this out is still advisable.

· Bank, Credit Card, and Mall issued cards are more likely to add expiration
dates and tack on annoying activation, maintenance, inactivity (some as high
as $25) and transaction fees (some as high as $10 per transaction). Some
bank-issued gift cards even charge a fee for simply checking the balance.
One example given through Consumer Report indicated that one Visa Gift
Card from U.S. Bank costs $3.95 if you get it from a branch, or $6.95 if you
buy it online. Then, after 12 months you are charged a $2.50 a month
inactivity fee if you don’t use it.

Some of the other fees you might find on some bank issued cards not
mentioned above include:

· Re-load Fees

· Replacement Fees

Know the Laws to Help Protect the Card Holder

1. Gift cards cannot expire for up to 5 years after their purchase.

2. Lack of use, or dormancy fees cannot be assessed until one year after
purchasing.

3. The card must include a phone number to call for fees and expirations
dates.

4. The new consumer protections apply only to merchant and bank-issued
cards. If you have a re-loadable card or one that is not marketed as a “gift
card”, pay close attention to the terms and conditions for that card.

5. In the state of Utah the gift card may not have an expiration date if the
information about the expiration date is not printed or included. The
expiration date must be printed and readable on the gift card, on the gift
card packaging or included with the gift card.

Be Wary of Buying Gift Cards off Open Stock Racks

People can write the card’s number down, scratch PIN’s off the back, or use
pocket scanners to get the card’s information. They can then check the
website to see if the card has been activated, and if it has, they go shopping.
Be on the lookout for any tampering of the gift card…opened packages, etc.
Verify that no protective stickers have been removed, and that the codes on
the back of the card haven’t been scratched off to reveal a PIN number.
Report any damaged cards to the store selling the cards.

Give the Recipient the Receipt Along with Card

This helps provide some recourse for the recipient in case the card has been
compromised or if it is stolen.

Check the Company’s Solvency

More and more businesses are going out of business. The sad truth is that
many of these companies will not honor issued gift cards. The best advice
we can give you is to get right on redeeming your gift cards once you receive
them.

Be Smart About Discount Gift Cards Sold On-line

While you will always be able to buy gift cards directly from retailers, there
are also many sites popping up that feature discount and even exchange
options too. However, a word of caution: The Better Business Bureau has
been getting some calls from unhappy customers who were scammed by on-
line purchases through places like Craigslist for discounted gift cards.
Apparently the buyer would be given a number to call and verify the cards
validity and amount, and then sometime between the verification and the
buyer actually getting their card (even as little as 30 minutes) the scammer
has spent the money on the card and you have purchased a $0 balance piece
of plastic.

There are many sites that will buy, sell, or trade gift cards, but you will most
likely not get the full value. Sites include cardpool.com, plasticjungle.com,
and

Remember also:

• The value on the card may not be refundable if lost or stolen.
• No identification or credit requirements to use them.
• Probably not insured if lost.
• Sometimes difficult finding what the fees actually are.
Resources

Consumer Reports

National Retail Federation

National Association of Credit Unions

Better Business Bureau