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Gift Card Tips
The gift card industry is soaring. Many call it a gift card gold rush due the huge sales that exceeded $110 billion in sales last year. However, there has been some negative press in recent weeks surrounding gift cards and some of the hidden loopholes that customers are unaware of.
We have provided these tips because we feel it is important that consumers are educated as to the various aspects and programs surrounding gift cards so that consumers are getting the best value for their gift card dollars.
- Beware of additional fees when purchasing cards online. The major credit card companies like American Express, Visa, and MasterCard sell a variety of gift cards online. Fees are involved, typically $4 to $5 plus delivery.
- Read the small print for your card. Recently there was media attention surrounding gift cards provided by a prominent bank that included monthly fees and an expiry date. In addition, if the card went past the expiry date, they levied a further fee to reinstate the card. Read the fine print so that you don’t end up sticking a friend with a gift card that costs them money every month they don’t use it!
- Check to see if there is an activation fee. Incredibly, some gift cards have hefty activation fees. For example, if you give a $25 gift card from a large drug chain, it will cost the recipient $9.95 to activate the card thus considerably decreasing the value of the gift card you’ve given.
- Beware of fraudulent cards. The increasing interest in gift cards has unfortunately increased the cases of fraud. A popular fraud involves a gift card being substituted with a fraudulent card inside the package. Once activated, the stolen card then has the value of the activated package. By the time you give the card to a friend or relative, the thief has long used up the balance, rendering your ‘fake’ card useless.
- Check on purchase exemptions. Make sure to find out if there are any exemptions to using the card, and if so what they are? For example, some cards are only usable in store and not online. Find out this information before purchasing the gift card.
- Find out if there is an expiration date. Many gift cards will note the expiration date right on the card or on the sleeve. If you don’t see an expiration date, ask a salesclerk if it has one and get their answer in writing.
- Give the gift card recipient the original receipt. If the gift card user has the original receipt, it helps protect the value of the card by verifying the card’s purchase in case it is lost or stolen.
- Find out if the gift card can be used towards a larger purchase. With some gift cards, if the purchase is more than the card amount, it may be automatically rejected. Some retailers systems are unable to handle an attempt to combine the gift card with cash or other form of payment.
- Determine if the restaurant will automatically add 20 percent to the cost of a meal when they submit the card for approval. A common practice with some restaurant gift cards, adding 20 percent for a tip could end up causing the card to be rejected – unless the diner tells the server in advance that they intend to tip with cash.
- Always know the balance on your gift card. If you know the balance when you are out shopping, you can advise the clerk if your purchase total will be greater or less than the amount of the card. If they know that information up front, often they can work around and end up using your card instead of having it automatically rejected.
Follow these gift card tips to ensure your gift card purchases retain their value for yourself and your gift card recipients!