Thursday, November 19, 2009

Gift Cards

I have bought many a gift card for gifts. They are easy to mail, one size fits all and the recipient can purchase what they want, not what I am guessing they might want.
However, I am changing my mind. It all started this summer when I was visiting a recipient of one of my gift cards and I saw the gift card still hanging around unused from last Christmas. When I asked why, the recipient said, "I keep forgetting to take it with me." Okay, but it's been 8 months.... Then I found out that 26% of gift cards are never used. What a windfall for the stores.
Now add to that stores love people to buy gift cards. Why? Because we, as consumers, don't spend $6.4 BILLION each year of the gift cards purchased. What??? That's someone's hard earned after tax cash, they've forked over for a gift card, and it's either lost or forgotten.
Some stores are charging fees to use these cards. Yes, there are fees to use them each time, fees if you don't use them by the "expiration" date (but the expiration date is in the very finest of fine print) and fees for non-use (subtracted every month the card is not used). Of course, all gift cards do not have all of these fees, but they are getting more common place.
Here are some tips.
1. Only buy cards with no upfront fees. That means you probably won't be buying any MasterCard, VISA or American Express cards. Their fees are $4-15, just to buy the card.
2. Pay attention to inactivity fees and transaction fees. Read the fine print on the card.
3. Use the card as soon as possible. Experts recommend you use a gift card 30 days from receiving it. Some of the gift cards are no longer valid simply because the store has gone belly up in this economy. If you don't use the card and the store goes out of business, you have the card in hand that will do nothing other than scrape the ice off your windshield.
4. Know your balance. Watch as the store cashier rings up your purchase so there are not any undisclosed fees charged to you.
5. Take care of you card, the same as you would cash. If you lose it, it's hasta la vista baby!

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