I love gift cards! I can use them to get what I want. I can save them until I really need something. I can treat them like “mad money.” But, as a both a purchaser and a user, I also have to be careful with them. Here are twelve reasons why:
1. Make sure that the recipient wants the card. Would great-grandma really appreciate a Victoria’s Secret card? She might, but you’d better make sure!
2. Shop for good local deals. During the holidays, many local retailers offer small “bonus” cards with the purchase of a gift card. You can keep the bonus card for yourself, give it to someone else, or even leave it as a restaurant tip.
3. They are like cash in that, if lost, there is no refund or replacement.
4. Cards are not exactly like cash, though. Watch out – sometimes they expire. Read the fine print on the back!
5. Some cards start charging a monthly fee after a certain period of inactivity. Again, read the fine print.
6. Crooks can use the card without even having the card – they just copy the card number and the PIN and activate the card by phone, then use it on the internet. Don’t buy a card with an exposed PIN!
7. Cards can be counterfeited – buy from a trusted local retailer, not online.
8. The amount available on the card may not match the amount that should be available. Give the card sales receipt to the recipient, in case the seller made a mistake – what if you purchase a $50 card, and the cashier only loads $5 onto it?
9. Same for usage – save your receipts so that you will know if there has been a mistake in the amount deducted.
10. If giving a gift card, make sure that it can be used where the recipient lives. While store cards may be used on the web, movie theatres are location-specific. Don’t give an AMC gift card if there are no AMC theatres nearby.
11. Pay attention to the economic news, and don’t give gift cards from shaky retailers. If the company goes bankrupt it may not have to honor the gift card – even if the stores stay open.
Bank issued gift cards (usually with a Mastercard or VISA logo) may not be any good if the bank goes under, or is purchased by another bank.
12. If you are purchasing a gift card, don’t let the seller charge you the sales tax – technically, you are not buying anything, you are simply exchanging cash for a different form of cash. Sales tax is applied when the user buys a taxable item.
Have a Happy Holiday, and remember to shop smart, and keep your financial wits about you!
by Dianna Coy Long at Mid-Missouri Bankruptcy Center
