Gift Cards Tips for Buying, Giving, and Using the Popular Plastic

During the 2005 holiday season, consumers reportedly purchased more than $18 billion worth of gift cards. The Federal Trade Commission tells consumers that gift cards, whether purchased from a retailer 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, and inactivity or non-use fees. A new consumer alert, Buying, Giving, and Using Gift Cards, available at www.ftc.gov/bcp/conline/pubs/alerts/giftcardalrt.htm, offers consumer tips, including:

• 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 for it. Make sure that whatever the salesperson tells you is in writing.
• Check on purchase exceptions. For example, can you use a store-specific gift card at both the physical store and the store’s Web site? 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 will not replace the cards, but others will replace them for a fee.

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.