Many of us find it convenient to buy gift cards when choosing holiday gifts. Gift cards allow the recipient to go to their favorite restaurant, store or simply buy what they want instead of what you think they want.
According to NRF’s first 2013 holiday survey, released in October, six in ten (59.4%) of those polled said they’d like to receive gift cards this year, the seventh year in a row gift cards have topped holiday celebrants’ wish lists.
It may seem simple to just pick up the card and pay for it. But, hold on. There are things you need to know about gift cards before purchase.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act which took effect in 2010, established standards that give consumers additional protections when using gift cards.
The standards prohibit retailers from:
1. Setting expiration dates less than five years after the card is purchased.
2. Charging dormancy, inactivity, and service fees unless the card has not been used for at least 12 months. If fees are charged after this period, the details of such fees must be clearly disclosed on the card.
These standards apply to store gift cards and general use prepaid cards, which are often branded by payment networks such as Visa, MasterCard and American Express. But there are some details the CARD Act doesn’t cover. For example, issuers can still charge fees every time the card is used, the balance is checked, a replacement card is requested or when customer service is called.
BBB recommends the follow tips before buying a gift card:
1. Always carefully examine both the front and back of a gift card before you buy it. If you can see a PIN number, put the card back and get a different one. If a gift card looks like it could have been tampered with, don't buy that gift card. Report any damaged cards to the store selling the cards
2. Ask the store cashier to scan the gift card in front of you. This will guarantee that your card is valid when you buy it and that it reflects the balance you just charged it with. This will also protect you from crooks who exchange worthless cards for the cards you think you are buying.
3. Provide receipt with gift card. Give the recipient of the gift card the original receipt in case the card is lost, stolen or there is a discrepancy with the balance.
4. Research before you buy. Buy from a known and trusted source. Research businesses at bbb.org to see a company’s BBB Business Review. Avoid online auction sites, because the cards sold there could be counterfeit or obtained fraudulently.
5. Read the fine print. Fully understand how the card works, if there are any fees associated with buying or using the card and if any fees will be deducted from the card after it is purchased.
6. Finally, never, ever give your Social Security number, date of birth or any other unneeded private information when you purchase a gift card. No reputable company will ask for this info.