What You Should Know About Today’s Gift Cards
More and more consumers are incorporating gift cards as a standard in their holiday shopping lists. Three our of four shoppers will be buying gift cards this holiday season and 85% will spend $50 or less on a gift card.
Under new federal rules, gift cards must remain valid for at least five years and some fees are limited. For example, inactivity and service fees can only be charged if a card hasn’t been used for at least one year. So, if you have any hanging around the house, use them fast! Don’t be one of the many people who never get around to spending their gift cards. 25% of people surveyed in a Consumer Reports survey last year who said they had received a gift card the previous year said they hadn’t used their almost-year-old card. Also, using up your cards fast might help you avoid ending up with a worthless piece of plastic, which can happen if the retailer ends up going out of business.
If you’re planning to buy gift cards for people on your holiday shopping list, beware that the cards might be printed with out-of-date information, including expiration dates and fees. The correct information is supposed to be posted at the store, so you should give the recipient a heads-up. Something else you should know is that the new rules don’t cover purchase fees. They range from $3 to $7 for the bank-issued variety with a credit-card logo. Most retailers don’t charge a fee to buy their cards.
Another way to avoid wasting money: Give the gift that you know will be used, never expires, has no fees, and is accepted almost everywhere: cash. If cash is not appropriate, and you must resort to buying a gift card, get one from a retailer that you know your recipient adores. That way it’s more likely that it will be used, and you won’t have to pay a fee to buy it.