As the holiday shopping season kicks off with Black Friday, many shoppers are avoiding the crowds and saving on gas by buying gift cards – the one-size-fits-all kind of gift.
The Connecticut Better Business Bureau (BBB), however, cautions consumers to do their homework, first. Not all gift cards are created equal.
“While the majority of vendors are honest, there is a degree of risk associated with buying gift cards from some online sites and over-the-counter displays at convenience stores and gas stations,” warns Connecticut BBB President Paulette Scarpetti.
Since January 2011, the BBB has received more than 440 complaints against the gift card industry, a huge increase from the 33 complaints received in 2010.
In some cases, consumers are disgruntled because they received an expired gift card that was loaded with cash, but the cards were not usable until the expiration date was corrected.
After sending their expired cards for replacement, updated cards were never returned, leaving the recipients empty-handed.
Connecticut’s Gift Card Law prohibits the sale of cards with expiration dates or inactivity fees.
The BBB has these tips for both gift card givers and recipients:
1. Know your rights
Federal rules that took effect in August of 2010 are designed to protect consumers by restricting fees and changing conditions regarding gift card expiration dates.
These new rules apply to two types of cards: retail gift cards, which can only be redeemed at retailers and restaurants that sell them, and bank gift cards, which carry the logo of a payment card network such as American Express, Visa, or MasterCard and may be used wherever those brands are accepted.
More information on the new rules is available from the Federal Reserve website at http://www.federalreserve.gov/consumerinfo/wyntk_giftcards.htm
2. Know the seller
Make sure you are buying from a known and trusted source. You can look for information about a business at www.bbb.org
And avoid online auction sites that promise ‘full value guaranteed’ gift cards. Some sites of this type have been reported to sell cards that are valueless, counterfeit, expired or obtained fraudulently.
3. Inspect the packaging and the card
Be on the lookout for gift cards that appear to have been removed from their packaging, are approaching their expiration date or are already are expired. Verify that no protective stickers have been removed and that the protective layer on the back of the card hasn’t been scratched off to reveal a PIN number. Report any damaged cards on display to the seller.
4. Read the fine print before buying
Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?
5. Provide the card’s recipient with back up
Give the recipient the original receipt in case the card is later lost or stolen. Also, before you buy retail gift cards, consider the financial situation of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless.
[Editor's note: I was given a $50 gift certificate to a children's bookstore that went out of business a week later and filed for bankruptcy. I was told by a state official that it is up to the now-closed business whether to refund or otherwise honor their gift cards. The bookstore owner chose not to.]
The BBB says if a business closes a store near the recipient [Blockbuster is a recent example], it may be hard to find another location where the card can be used.
A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the business or its competitor to find out if they are redeeming the cards, or will do so at a later date.
6. Treat the gift card like cash!
For recipients, it’s important to immediately report lost or stolen cards to the issuer. Some issuers may not replace them, while others will, for a fee. Make sure to use gift cards as soon as possible; it’s not unusual to misplace or forget about them.
Founded in 1928, the Connecticut BBB is an unbiased, non-profit organization that sets and upholds high standards for fair and honest business behavior.
The BBB helps consumers find and recommend businesses, brands and charities they can trust, offers objective advice and a wide range of education on topics affecting marketplace trust. The BBB also offers complaint and dispute resolution support for consumers and businesses.
Today, 116 BBBs serve communities across the U.S. and Canada, evaluating and monitoring more than three million local and national businesses and charities.
Posted Nov. 25, 2011
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