Giving gift cards for the holidays? Things to know before you buy
Filed under: Black Friday, Holiday Shopping
Gift cards are the most popular and most requested item this holiday season; with 57% of adults saying they prefer to receive gift cards this year, according to the National Retail Federation. And for those who give and receive, there are many reasons to rejoice. New laws have extended redemption periods and required issuers to make rules and fees more clear. Still, with so many options out there, there are things savvy shoppers should be aware of. New rules governing gift cards were part of the Credit Card Accountability Responsibility and Disclosure Act passed earlier this year, designed to deliver more transparency regarding expiration dates, fees and other restrictions. So if you've heard horror stories about gift cards expiring before they can be redeemed, or users been charged fees that eat away at the balance, breathe easy. The new laws state cards must remain valid for five years after the date of issue, and issuers can't charge inactivity fees until after 12 months without using the card.
There are basically two kinds of gift cards:
- Closed loop cards, or those issued by a specific store or brand. These cards are redeemable only at the named store or company, like Best Buy, Target, or Apple's iTunes.
- Network cards like those issued by Visa or American Express. These cards are good anywhere that brand is accepted. Network cards typically charge fees, that's how the banks make money, but thanks to the Credit Card Accountability Act, these fees must be clearly communicated on the card itself.
So when shopping, you'll likely see a mix of old and new cards. Bankrate studied 54 cards, included 46 from some of the largest restaurant and retail chains and concluded that most carry no expiration date and few fees. A handy list, breaks down the benefits of each card surveyed, and while Bankrate doesn't rank the cards or make recommendations, WalletPop noted a few trends and standouts.
Many store-specific cards offer the most ways to redeem. Look for "e-card" options like those on gift cards from JCPenney, Kohl's, Target and Walmart. Many are reloadable, so recipients can combine multiple cards onto one or add to a dwindling balance. We particularly like those cards that let you check the balance online; knowing how much you have to spend before getting to the checkout is a relief.
Only one card in the survey -- the KeyBank MasterCard -- requires a PIN number to use, but many have security codes on the back necessary to use both in-store and online. If you're giving gift cards this holiday season, Bankrate's McFadden recommends including the original receipt with the card. That way, even if they lose the card, it can be replaced using information on the receipt.
McFadden also advices gift card givers to look closely at the card and packaging, to see if it's compliant with the new law.
"You don't want to wind up buying a card that isn't compliant to the new rules, be on the lookout," she said. "And if you're a person getting a gift card spend it right away and try to spend the full value all at once." Otherwise, you just might lose the card or squander some of its value.
AOL
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Reader Comments (Page 1 of 1)
11-08-2010 @ 9:46PM
Susan said...
What's really sad is that the majority of comments now come from people selling a site or product instead of people who read the articles.
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11-08-2010 @ 9:42PM
Holly said...
Gift cards are a great idea. That's true. However, in these hard economic times many folks cannot afford to give expensive gifts and might have a hang up about giving a $25 gift card instead of the $100 they used to give. The dept. stores let people charge the gift cards then make interest and the person buying it endes up paying interest.
Solve the problem by only paying cash and buying within your means. Xmas is too commercial anyway.
A couple years ago I decided everyone I knew had "plenty" and donated money to charity in their name, instead.
Everyone was tickled with that idea knowing the money was going to help the less fortunate.
Think about that this year......and remember, you get a tax deduction just for being nice.
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11-08-2010 @ 10:55PM
Chuck said...
These cards are a scam, just give the person the money at least it doesn't expire. I don't buy nor accept gift cards. In a tough economy I insist none of my friends or colleagues give me any gifts. I would much rather see them give to charities or some other worthy cause.
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11-08-2010 @ 11:36PM
scarlet said...
I LOATHE THESE GIFT CARDS. I HAD A FRIEND PAY ME $750.00 WITH A GIFT CARD ! I WOULD HAVE LOVED THIS CASH OR A CHECK INSTEAD. IT CANNOT BE CONVERTED INTO CASH. WHY WOULD ANYONE WANT THESE?. I PREFER TO USE MY OWN CREDIT CARS AS I GET 35 AND 5% REWARDS ON THEM.
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11-08-2010 @ 11:45PM
Sylvie said...
If you purchase a gift card at a supermarket or drug store, make sure the card has been activated, and keep the receipt. My sister gave me a gift card for Barnes & Noble last year that she bought at her local Safeway, and I could never use it because they had no record of it being purchased. And of course, she threw away the receipt. So, B&N; has my sister's money, and I'm out a Christmas prezzie!
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11-09-2010 @ 11:01AM
tom kelly said...
I don't like giving gift cards (and have never done it). It's like leaving the price tag on a traditionally-given gift. Also, I just don't like to advertise what I've spent on somenone. Seems tacky, somehow. I ,must say I did enjoy a gift card from Barnes & Noble, because my friend knows I love books. Took me a long time to remember to use it, though....glad there was no time limit.
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11-09-2010 @ 2:48AM
Jethrine said...
I don't like gift cards. They are as impersonal as someone handing you a fistful of cash for Christmas, only with limits on where you can spend it. You don't have to spend a lot of money or even a lot of time to come up with a better gift that means something. Some of the most thoughtful gifts I've ever received were old family photos in frames or some cool thing that someone found for me at a thrift store. Once, a friend found a toy that was just like my favorite one as a little girl, and that was so touching and wonderful because it meant that he knew me well enough to know I would love it. Gift cards take all the fun and joy out of gift giving. They make great wedding gifts, but not for Christmas...no.
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11-09-2010 @ 5:56AM
Michele said...
I happen to like gift cards...as long its a store I do shop at. If I don't, I am more than likely going to either give it to someone else or just not use it.
Many people sure would love cash or check instead and so would I. But I will not be picky about it and will accept a gift card. It's the thought that counts, does it not?
Get with the program and be grateful that you even received a gift! Geez!
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11-10-2010 @ 9:41AM
Jean Sheets said...
www.thislineofmine.com has gift cards available in $10, $25 and $50 amounts. They have NO EXPIRATION DATE. The only stipulation is: One gift card may be used per purchase. If the total amount is not used when the purchase is made, the site keeps track of the balance left to be used at another time. When using a gift card on this site, simply click on "Redeem Gift Card" (top right) for instructions. There are five catalogs, including a Christmas catalog from which to choose. There is something for everyone! Once you click on eCatalog (top left), all of the catalogs will appear on your screen. After clicking on a catalog, look at top left again, and click on what you would like to do (view all pages, etc.). Why not buy a gift card, instead of a gift and let him/her choose what they would like to have. This would solve any gift-buying problems. There is a 10% Discount on each purchase, and a 50% Shipping Discount with the purchase of $50 or more through December, 2010.
Thanks so much!
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11-12-2010 @ 1:39AM
Prendas Online said...
Really they are very affordable prices everyone can purchase it very easily. thanks for sharing.
Prendas Online
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