October 3, 2007

Sound Tips for Buying and Using Gift Cards

Last year, the FTC published a consumer alert containing tips on purchasing, giving, and using gift cards. With the 2007 holiday season around the corner and gift card sales expected to hit $35 Billion, it is a good time to review those tips. We’ve summarized the main points here for you.

  1. Not all gift cards are made same. Most of them have strings attached.
    Read the terms and conditions carefully, especially regarding fees and expiration.
  2. Heavily evaluate the fees associated with the gift card.
    For example, bank gift cards, like Visa & MasterCard, have all sorts of fees from activation to dormancy and everything in-between.
  3. Treat gift cards like cash.
  4. Ask for a gift receipt or register the gift card, in case gift card is lost or stolen. Some issuers will replace them (some will charge a fee) if proof of ownership is provided.
  5. If you have a problem with a gift card, the first step is to contact the store or bank that issued it.

Most importantly understand the gift card’s terms and conditions as it varies widely from issuer to issuer.

FTC Consumer Alert: Buying, Giving, and Using Gift Cards. [Published 12/2006, PDF]

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