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Giving a Gift Card

Giving a Gift Card

            They are an $88 billion dollar business, a time saver for busy shoppers and an answer to the question – “what do I give?”.  They are gift cards and their popularity is growing and going.  But before you buy a stack of gift cards, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to be informed about the not so great aspects of gift cards.

            Let’s start with defining the two types of gift cards. First are “retail” gift cards which are sold by retailers and restaurants, and can be used only with that particular business.. Retail gift cards may have expiration dates or a fee for inactivity that sometimes is called a “dormancy fee.”   Next are “bankgift cards which carry the logo of a payment card network like VISA or MasterCard, and can be used at any location accepting cards from that network. There are more likely to be fees for activation, maintenance, or transactions on bank gift cards than on retail gift cards.

            Regardless of where or whom you buy a gift card from, the FTC recommends that you:

  • Buy from sources you know and trust. Avoid buying gift cards from online auction sites, because the cards may be counterfeit or may have been obtained fraudulently.
  • Read the fine print before you buy. If you don’t like the terms and conditions, buy elsewhere.
  • Ask about expiration dates and fees when you’re buying a card. This information may appear on the card itself, on the accompanying sleeve or envelope, or on the issuer’s website. If you don’t see it, ask. If the information is separate from the gift card, give it to the recipient along with the card to help protect the value of the card.
  • Consider purchase fees: Must you pay a fee to buy the card? If you buy the card online or on the phone, is there a fee for shipping and handling? Does expedited delivery cost more?
  • Consider fees that may be deducted from the card, including activation, maintenance or transaction fees. It might be embarrassing to give someone a $50 gift card and find out later that fees gobbled up most of the amount.
  • Inspect the card before you buy it. Verify that none of the protective stickers have been removed, and make sure that the codes on the back of the card haven’t been scratched off to reveal a PIN number. Report tampered cards to the store selling the cards.
  • Give the recipient the original receipt to verify the card’s purchase in case it is lost or stolen.
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