Holiday Gift Card Tips - MetroFamily Magazine
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Holiday Gift Card Tips

by Sue Lynn Sasser

Reading Time: 3 minutes 

Did you know we spend about $60 billion annually on gift cards? If you received one during the holidays or another special occasion, be aware of the fine print. Congress has passed new legislation to regulate gift card fees, expiration dates and other features, but those changes do not take effect until August 2010.

To ensure you get the full value of the card, carefully read the fine print or ask the issuer questions about some of the following gift card features:

  • Inactivity Fees. About one-third of gift cards—over $20 billion worth—are not spent within the first six months after purchase. The best way to get the full value of a gift card is to use it immediately. Under current practices, your gift card may decrease in value by $2.50 each month because of “dormancy” fees if not used. The new rules, however, require a twelve-month grace period before the issuer can institute dormancy fees. Until those rules come into effect, you may want to check with the issuer of your gift card to determine its policy on inactivity unless it is spelled out on the back of the card.
  • Expiration Dates. Carefully read your gift card for the expiration or “valid through” date. It should be stated on the back of the card. Expiration dates vary greatly from one issuer to another, and the card becomes worthless if not used by that date. Some issuers will extend the expiration date if you call and request an extension, but they are not required to do so. The new legislation standardizes expiration dates, making cards valid for five years after the date it was issued (unless, of course, the full amount is used before then). The new legislation also requires information on expiration dates be clearly stated on the card.
  • Replacement Cards. Policies on providing replacements for lost or stolen gift cards vary from one issuer to another. As with expiration dates, the new legislation requires this information be clearly stated on the card. While such disclosures may be helpful when purchasing the cards, it still requires a proof of purchase. The receipt for the gift card is generally the best evidence, so remember to keep the receipt in a safe place. If you have recently lost a gift card, ask the purchaser if the receipt is available and contact the issuer. You may have other options, however.

    When receiving a gift card, write down the card number, the issuer’s name and phone number, and keep the information with your personal records. Or, make a photocopy of the card, noting the date received. Some will replace your card with the card number, even without a receipt.

  • Online Registration and Shopping. Some merchants who issue gift cards allow you to register those cards on their websites. Then if you lose the card, the information is already recorded. Of course, just having your card number available allows you to make online purchases even without having the card physically in your possession.
  • Frauds and Scams. Whether buying or receiving a gift card, watch out for scratches or signs of tampering. High-tech fraudsters scan or copy card numbers in stores, then spend the money online as soon as the card is activated, leaving you with a worthless piece of plastic. If given the option, ask the clerk for a card that has not been sitting on a rack. Or, consider purchasing e-certificates from online retailers and skip the cards. Keep in mind, these new regulations go into effect in August of 2010, and they will apply only to conventional gift cards and NOT to the following:
    • Prepaid telephone cards
    • Reloadable cards that are not marketed as or labeled as gift cards • Loyalty, rewards or promotional cards
    • Cards that are not available to the general public.

Meanwhile, if you got a gift card for the holidays, you may want to stop everything now and go shopping!

Sue Lynn Sasser, PhD, is an associate professor of economics at the University of Central Oklahoma.

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