The No Hassle Gift? Tips on Buying, Giving, and Using Gift Cards

Consumers are projected to spend $25 billion on gift cards in the 2006 holiday season. The Federal Trade Commission tells consumers that gift cards, whether purchased from a retailer, a restaurant, or a financial institution, may come with strings attached.

In particular, consumers should know that some gift cards have expiration dates; others have fees that can lessen the card’s value, including activation fees, transaction fees, monthly maintenance fees, balance inquiry fees, replacement fees for lost or stolen cards, and inactivity or non-use fees. A consumer alert, “Buying, Giving, and Using Gift Cards,” offers consumer tips, including:

• Buy from sources you know and trust. Avoid buying gift cards from online auction sites; the cards may be counterfeit or may have been obtained fraudulently.
  
  
• Read the fine print before you buy. If you do not like the terms and conditions, buy elsewhere.
  
  

• When buying a card, ask about expiration dates and fees. This information may appear on the card itself, on the accompanying sleeve or envelope, or on the issuer’s Web site. If you do not see it, ask. If the information is separate from the gift card, give it to the recipient with the card to help protect the card’s value. It also is a good idea to give the recipient the original receipt to verify the card’s purchase in case it is lost or stolen.
  
  
• Check on purchase exceptions. For example, can the recipient use a store-specific gift card at either the physical store or the store’s website? Can an “all-purpose” card really be used to buy groceries or gasoline?
  
  
• Treat gift cards like cash. If your card is lost or stolen, report it to the issuer immediately. You may be out the entire amount on the card. Some issuers do not replace the cards, but others do if you pay a fee. If an issuer charges for a replacement card, you will most likely need to document the purchase and provide the ID number on the card. Most issuers have toll-free numbers to report lost or stolen cards.

“Buying, Giving, and Using Gift Cards” is available on the FTC’s Web site at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt010.htm.

Copies of the consumer alert are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them.