Be careful about gift cards

You don’t have to go far to find one a gift card. You can find them at malls and department stores, even grocery stores.  However, despite their popularity, these cards don’t always come without problems.

In the past few years, gift cards jumped to the second most popular gift you can give. Clothing remains the number one gift.  Sales of gift cards for 2008 are expected to jump to 100 billion dollars. It’s estimated 62 percent of consumers plan to give gift cards this year.
   
But you need to pay attention to the fine print.  According to Consumer Reports, gift cards come in two varieties: Retailer Issued cards that are redeemed at a particular store only and Bank Issued cards associated with a credit card company such as a Visa gift card.

Be careful where you buy retailer cards, when stores close, the card normally becomes worthless. With bank issued cards you’ll want to be careful about fees and expiration dates.

It’s a very unregulated industry. Companies reserve the right to change the rules at any time. Check the card rules before you buy it.  I checked with the South Carolina Department of Consumer Affairs today.  They offered up this advice:

• You should avoid card racks and purchase from behind the counter. Thieves steal card activation numbers. Also look for a scratch off pin number.
• Know the terms upfront.  Is there an expiration date? Does it lose value over time? Is there an activation fee? Those are some of the ways you lose money.
• Be sure to save the receipt and include it with the card.

The Consumers Union is working to protect consumers.  They petitioned the Federal Trade Commission to mandate companies to keep the money in trust accounts in case they close.  They also drafted consumer protection legislation hoping states will adopt it.

South Carolina plans to address this in the upcoming legislative session.