by Broderick Perkins
(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, a Santa Clara, CA-based financial information publisher and interest rate tracker.
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.
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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