Gift Cards: BBB Tips to Play Them Right

December 04, 2012

Are you a somewhat lazy, last minute shopper? If so, you've probably already embraced the ease of giving gift cards. In fact, over 81 percent of shoppers will give at least one gift card this holiday season and spend an average of $156 on cards reports the National Retail Federation. But beware, if the recipient shares your aversion to shopping, your gift may go unused, shoved to the back of a junk drawer or forgotten on an island good intentions and drowned by clutter.

According to a study by CEB's TowerGroup, $41 billion in gift cards went unused from 2005 to 2011. Federal regulations adopted in 2009 prohibit a retailer from charging dormancy or inactivity fees for cards in the first year and from setting expiration dates shorter than five years from the date of purchase. Gift card issuers must also clearly disclose any and all fees. The "CARD" Act changes, says the TowerGroup, have helped the redemption rate improve over the last six year from 10 percent to 1.6 percent. One important caveat to the Federal law that comes into play here at home - store-specific gift cards and gift certificates may expire in four years, not five.

The NRF says 39.1 percent of people will give department store gift cards this season, 33.3 percent will buy restaurant cards and 20.8 percent will opt for book gift cards.

BBB recommends the follow tips before buying a gift card:

  • Research before you buy. Buy from a known and trusted source. Research businesses at to see a company’s BBB Business Review. Avoid online auction sites, because cards could be counterfeit or obtained fraudulently.
  • Read the fine print. Fully understand how the card works. Can it be used online, in-store and at all physical locations? Are there any fees associated with buying or using the card? Will fees be deducted from the card after it is purchased?
  • Inspect the card before buying. Verify that protective stickers have not been removed and the PIN Number on the back of the card is not exposed. Report any damaged cards to the store selling the cards.
  • Provide receipt with gift card. Give the recipient of the gift card the original receipt in case the card is lost, stolen or there is a discrepancy with the balance.