Gift cards: More tips on using plastic

Thinking of giving gift cards for Christmas? Keep in mind that some of them come with expiration dates or fees that can significantly reduce their value. There are basically two categories of gift cards: those that can be used at multiple, unaffiliated businesses and those for use only at a single business.

Multiple-business gift cards can come with purchase fees, monthly fees, inactivity fees, transaction fees, balance-inquiry fees and replacement fees. They can also have an expiration date. All fees and restrictions must be disclosed, according to the California Department of Consumer Affairs, so look at the fine print when considering these cards. California requires that any expiration date be printed on the card itself.

Single-business gift cards, on the other hand, come with important consumer protections in California. They cannot have an expiration date and, in most cases, you cannot be charged a service fee. The business can only assess a “dormancy fee” for non-use if the value on the card is less the $5 and the card has not been used in two years. Gift cards or gift certificates for food items can have an expiration date, as long as it is printed in 10-point type on the card or certificate.

Another plus for the single-business gift cards: Under a state law that went into effect this year, if the value of the card is less than $10, the business must allow you to exchange it for cash.

Given the current economic climate, here’s a warning: If a business declares bankruptcy, its gift cards are pretty much worthless, unless the holder wishes to file a claim against the bankruptcy estate.

For more information on gift-card rules or if you have a complaint, contact the Department of Consumer Affairs at (800) 952-5210.

-- Scott J. Wilson

Photo credit: Anne Cusack/Los Angeles Times

Comments

[Andrew Elliott]

Why not avoid the hassle. There are a number of websites that are starting to emerge that will preserve the convenience of gift cards, but make the giving experience more interactive, personal, and rewarding. Lottay is one of those http://www.lottay.com.

The advantages of these sites include:
A clear and specific gift goal that can be anything from travel to electronics
An easy way for friends and family to buy you all or part of your perfect gift
Instant access to real money, not a card that can only be used in one place
The security and protection of using the global leader in online payment solutions

The fundamental difference of these types of websites is that they take the individual’s perspective as opposed to the merchant’s.

[Austin Chu]

I work for a company that manages and tracks gift cards. It's unfortunate that retailers for filing for bankruptcy, and destroying the trust factor in gift cards. At LeverageCard.com, when gift cards are purchased from us, we guarantee your gift cards when retailers file for bankruptcy:http://tinyurl.com/5nfk5f