Finding the perfect gift for those on your holiday list can be stressful. Giving a gift card can often be a better alternative.
This has the Better Business Bureau of St. Louis advising consumers to do their homework before purchasing a gift card.
“Gift cards can be the perfect solution for the person who’s hard to please or a relative who lives in another city,” said Michelle Corey, BBB president and CEO. “But buying cards with too many fees or conditions can erode their value. You may be better off giving cash or a check instead of plastic.”
Despite this advice, gift cards are still a popular choice among consumers. According to the online statistics company, Statista, gift card sales are expected to reach $149 billion this year, with a third of sales occurring during the holiday season.
The National Retail Federation reports that six out of 10 consumers say they would like to receive the cards. However, more than $2 billion in gift card value goes unused every year.
Every year the BBB receives hundreds of complaints about gift card purchases. Some consumers have reported problems with sites that sell gift cards online.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which took effect in 2010, provides some protections to consumers who receive gift cards. This includes requiring that card balances remain valid for five years after issuance or after they were last loaded with money. Fees and expiration dates may still apply, however, and fees can erode the value of the cards.
The BBB has tips for avoiding the pitfalls for those purchasing and receiving gift cards:
• Be cautious about buying gift cards from online auctions because it is virtually impossible to tell whether the cards have any value remaining, to determine whether they’ve been tampered with or to see if they have expired.
• When buying gift cards in a store, check the packaging and any security seals to be sure they are intact and haven’t been tampered with.
• Check the fine print to see if there are fees associated with the card. Some typical fees could include transaction fees or inactivity fees. In some cases, an organization may charge a service fee to issue the card or a replacement card.
• See if the card has an expiration date. In some cases, the plastic card may expire before the five-year redemption period. Are there fees to obtain a new card?
• Check the terms and conditions on a gift card. If you are giving a card to a friend who wants to shop online, make sure the card can be used that way and not just in a store.
• Consider the financial condition of the retailer or bank issuing the card. If you think the store may be on shaky footing, you may want to pass on buying a card.
• If a business displays the BBB Accredited Business seal, click on the seal to confirm that it is authentic. A valid seal will link to the firm’s BBB Business Profile.
More information is available online at www.bbb.org or by calling 314-645-3300.