Press-Republican

December 13, 2011

Gift card givers, beware: 6 tips to protect your purchase


CNHI News Service

— Many shoppers looking for a simple, easy present for friends and family this holiday season will turn to gift cards, letting the recipient do the shopping at their favorite store or restaurant.

But the Better Business Bureau says consumer complaints about gift cards are on the rise, and they are warning buyers to beware of potential pitfalls before purchasing them.

The agency has received more than 750 complaints against the gift card industry so far this year, up from just 33 complaints last year. One of the biggest concerns? Consumers receiving expired gift cards that aren't usable until the expiration date is corrected. When they send the card in for replacement, it never comes back, and they’re left empty-handed.

Here are some tips for both givers and receivers of gift cards, courtesy of the BBB:

Know the rules. New federal rules that took effect in August of 2010 are designed to protect consumers, restricting fees and affecting gift card expiration dates. These new rules apply to two types of cards: Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express, Visa, or Mastercard and can be used wherever the brand is accepted.

Check it out. Make sure you are buying from a known and trusted source. Always check out a business at www.bbb.org. Avoid online auction sites, because the cards sold there may be counterfeit or may have been obtained fraudulently.

Read the fine print before buying. Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?

Inspect the card before buying it. Verify that no protective stickers have been removed, and that the codes on the back of the card haven’t been scratched off to reveal a PIN number. Report any damaged cards to the store selling the cards.

Provide the receiver with back up. Give the recipient the original receipt in case the card is later lost or stolen. Also, before you buy retail gift cards, consider the financial condition of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the business or its competitor to find out if they are redeeming the cards, or if they will do so at a later date.

Treat the gift card like cash. For receivers, it’s important to report lost or stolen cards to the issuer immediately. Some issuers will not replace cards that are lost or stolen, while other issuers will, for a fee. Make sure to use gift cards as soon as possible, because it’s not unusual to lose or forget about them.