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Gift Cards...they are NOT all the same when it comes to fees
With the holiday season right around the corner, many shoppers are looking for the best gift options for family and friends. Gift cards may seem like a simple solution, some gift cards carry high fees making them far from a good deal.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which took effect in 2010, established standards that give consumers additional protections when using gift cards. The standards prohibit retailers from:
- setting expiration dates less than five years after the card is purchased; and
- charging dormancy, inactivity, and service fees unless the card has not been used for at least 12 months. If fees are charged after this period, the details of such fees must be clearly disclosed on the card.
These standards apply to store gift cards and general use prepaid cards, which are often branded by payment networks such as Visa, MasterCard, Discover and American Express.
But there are some details the CARD Act doesn’t cover:
- issuers can still charge fees every time the card is used, the balance is checked, a replacement card is requested or when customer service is called.
BBB recommends the follow tips before buying a gift card:
- Research before you buy. Buy from a known and trusted source.
- Avoid online auction sites, because the cards sold there are often counterfeit or obtained fraudulently.
- Read the fine print. Fully understand how the card works, if there are any fees associated with buying or using the card and if any fees will 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. Thieves and crooks jot down the card numbers in the store and then wait a few days and call the 800 number on the card to see if the card has been activated and how much balance is on the card...Once they confirm the card has been activated they go online and start shopping.
- 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.
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