by Broderick Perkins
DeadlineNews.Com
(10/6/2011) Erate Exclusive - It's just about that time of year when
harried holiday gift shoppers begin to stock up on gift cards to take the
guesswork out of giving.
Everybody likes cash. Gift cards typically aren't re-gifted.
However, in some cases, they are only almost as good as cash.
The Office of the Comptroller of the Currency advises you to be aware of
what you get and what you don't get when you buy gift cards.
Retail sales complaints, which include gift cards, was No. 3 on the "Nation's Top 10
Consumer Complaints" list, a study of consumer complaint data from 31
consumer agencies in 2010.
Know the fees
Some gift cards come with fees above the face value and cost of the card.
Others don't. Some fees are deducted from the value on the card, while
others must be paid separately. Fees can include:
• Purchase fees that are charged when
you buy a gift card. These are in addition to the money you pay to put
spending value on the card.
They can include:
• Inactivity, dormancy, or service fees that may apply, but only if
there has been no activity on the card for at least one year. After a year,
only one dormancy, inactivity, or service fee may be imposed in any calendar
month.
• Transaction fees for using the card for all transactions, for a
large number of transactions, or for certain types of transactions, for
example, ATM withdrawals.
• Miscellaneous fees for balance inquiries, adding funds to the card,
replacing a lost or stolen card, and other services related to the card.
Read the small print
Read disclosures that must be provided by gift card issuers
when you purchase the gift card. Disclosures include information about the
type, amount, and frequency of any fees that apply to the gift card. Call
the toll-free telephone number or access the Web site address on the gift
card if you have questions about fee information.
"Gift cards are big business today. Many are not aware that the Safeway grocery chain's Blackhawk Network is a key player in this industry and
that this is a major source of revenue for the chain," said Nancy Osborne,
Chief Operating Officer of Erate.com, a Santa Clara, CA-based financial information
publisher and interest rate tracker.
Expiration dates
Make sure you know the expiration date of the card, if there is one. By law, gift cards issued after
August 22, 2010, may not expire for at least five years after purchase. Any
money added to the card may not expire for at least five years after the
value is added. If a gift card expires, and money remains, determine if the
card can be reissued with a new expiration date.
Expiration information should be stated on the gift card or its
packaging, along with a toll-free number or Web site that will provide this
information.
Lost or stolen cards
• Determine the rules for lost or stolen cards. Can you get a
replacement card and, if so, is there a replacement fee? What happens if
someone else uses the card after it is lost or stolen? Would that money be
credited to the replacement card?
If this information is not on the gift card or its packaging, use the
toll-free number or Web site provided to obtain this information.
• Keep the receipt for the gift card purchase and write down the
card number. You may need this information if you or the recipient needs a
replacement.
Locations where you can use the card
A retail store gift card often can be used only at the store indicated or
at related stores. Other gift cards, like those affiliated with American
Express, Discover, MasterCard, or VISA can be used at many locations. Some
gift cards can even be used to get cash at an ATM.
Trust the issuer
A gift card is like a loan. You give money to the company that holds the
value of the card until it is used. The company promises to give that money
back when the card is used. Make sure you trust the company standing behind
that promise. You are putting your trust in that company and its financial
stability.
Problems, complaints
If your gift card is not working properly, or you face another problem,
call the toll-free number or access the Web site listed on the card or
packaging.
• If more complete information about fees, expiration dates, or
other matters appears on a document separate from the gift card itself, pass
that important information onto the recipient of the card.
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