Shopping for gifts can be a real dilemma. Just what do you get the person who has everything: your finicky Aunt Mary, your co-worker, or your child's babysitter? Gift cards may be the answer: one size fits all, and the recipients can get exactly what they want.
But before you buy a sack-full of gift cards from your favorite retailer, restaurant, or local financial institution, the Federal Trade Commission (FTC) wants you to know that some strings may be attached. For example, some cards can be used only at the retailer's store locations; others can be used at any retailer and online. Some cards have expiration dates; others let the user "reload" or add money to the balance on the card. And some have fees, like activation fees, transaction fees, monthly maintenance fees, replacement fees for lost or stolen cards, or balance inquiry fees. Or there may be a fee for inactivity. For example, if someone hasn't used the card in a while, say, 24 months, a fee might be deducted from the balance each month until the card is used or the balance is checked.
Consumers are projected to spend a whopping $25 billion on gift cards in the 2006 holiday season, up from the $18 billion they spent on gift cards a year ago.
Store cards sold by retailers usually are issued free of charge. But banks often charge consumers a fee to buy their cards. Some bank gift cards come with a Personal Identification Number (PIN) that lets the user withdraw cash from an ATM.
Regardless of who you buy a gift card from - or where:
If you've received a gift card, be smart about how you use it.
If you have a problem with a gift card, the first step is to contact the store or financial institution that issued the card. If you can't resolve the problem at that level, you may want to file a complaint with the appropriate authorities:
For cards issued by retailers: Contact the Federal Trade Commission at ftc.gov or call toll-free: 1-877-FTC-HELP. You also may file a complaint with your state Attorney General (for a list of state offices, visit www.naag.org.)
For cards issued by national banks: Contact the Comptroller of the Currency's (OCC) Customer Assistance Group by calling 800-613-6743 or sending an e-mail to: customer.assistance@occ.treas.gov. The OCC charters, regulates, and supervises national banks, some of which issue gift cards.
The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.