Gift cards are a very popular way to give a gift to someone. You don’t have to worry about size, color, or individual taste. In this case, one size fits all, as long as you pick a store or restaurant that the recipient likes.
However there are a few things you need to think about or decide on before you purchase a card. The following are some of the most asked questions concerning gift card purchasing.
What value do gift cards come in?
The answer to that question depends on where you buy the card. Some merchants set a beginning price of $25.00, with the ability to go higher than that in nearly any increment. Some businesses might have a lower minimum and some more expensive establishments might even have a higher minimum. It’s something you will need to ask before you buy. I received a $5 gift card from Starbucks at Christmas that was just the right amount for one coffee drink.
How long is the gift card valid?
This too depends on the place the card is bought. Some businesses have a one year limit, with others having a five year limit. One thing you can be sure of, there will be a limit. Quite a few of the cards will have a decreasing value starting with several months after purchase. A gift card should really be redeemed as quickly as possible after receiving it to get the full benefit of the card.
In the US there are new Federal Regulations on gift cards that will go into place on August 2010. This new law insures that the card must not expire for five years and that no fees can be assessed if the card is used within the first 12 months. If you have gift cards that were issued before August 2010, use them. There are some gift cards that may become null and void when the new regulations go into effect.
Can I get my money back if the card is lost or stolen?
The answer to that question is usually a definite NO. Gift cards are normally cash cards not registered to a specific name but to a card ID number. Anyone can use them. You need to think of a gift card as though it were cash in hand. If you lose cash, you’ve just lost it-no one pays you anything for it. The same is true with a gift card. By the same token, if you find one that still has a balance on it you might as well use it because there isn’t any way to trace it back to a specific person.
How do I check my balance?
This is fairly easy as most cards can be read by a cashier. If the card is for a specific business you would need to check with a cashier in that particular store or a branch of that business. If it is a gift card that can be used anywhere any cashier should be able to scan it and tell you the balance. Sometimes there is a number or website on the back of the card where you can call or go online to check balances.
Does all the card value have to be used at once?
That answer is a general no. But it might depend on the amount that is left on the card. If the balance left is only a few dollars, by the time you get around to using it again the few dollars may have decreased to a few cents or nothing at all because of “no-use” fees or other charges.
In most states in the United States the establishment issuing the card can make up their own rules and regulations. They can even change those rules after you’ve bought the card and not bother to tell you of those changes. They can charge an interest on the card and deduct that interest when the card is used. And as explained above, the card can have an expiration date even if that wasn’t specified when the card was purchased.
Some of these business practices will be managed by the new federal government regulations, but not all of them. If you are spending very much money-or any money- on a gift card you really need to get some written commitments concerning the card.
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The gift of a gift card can be a fun and even exciting gift to receive. To make sure the gift card you give is appreciated, here are a few tips to help you accomplish just that. Gift cards, like any gift, can be thoughtless and a careless giving, or it can be very thoughtful and a truly personalized gift.
Tip One – Customize Giving
First, as when giving any gift, you need to think about what the person receiving the gift card likes to do. What does the receiver like in the way of entertainment, where do they like to eat, or where do they like to shop? Gift cards can mean a trip to a museum or to the movies. They can provide a meal at a favorite restaurant or offer a new dining experience.
Gift cards can offer so many ways to express your good wishes for a friend or family member. A well thought out gift card can be easy when it is for a person that you know well. If you know what they like to do, where their favorite restaurant is, what they might like to try sometime, a gift card is an easy choice. On the other hand, a gift card that offers someone a new adventure, or gives them the chance to go to dinner or movie when they otherwise couldn’t squeeze that into their budget can be the perfect gift.
Tip Two – Specific Stores
However, sometimes you might just want to give someone a gift that may help with their grocery budget. In this case, make sure the card is to a store where they like to shop. If they hate the meat, or the produce at a certain store they might not even use the card. You also need to make sure that any gift card to a clothing store or specialty store is one they will use.
Tip Three – Online
Something to keep in mind is not all gift cards will allow you to shop online. Even specific shops who have online shopping, may not allow you to use the gift card for online purchases. So if the receiver does a lot of online shopping, make sure you know if the card can be used online or let the person know it is for the store only.
If you purchase a gift card online, be doubly sure of the rules that govern that card. Know the expiration dates and any charges – like if the card has “no-use” fees and isn’t used in a timely manner. Also, can the gift card you bought online be used in the local store?
Tip Four
There are those situations where you want to give something to someone you really don’t know. Like if you plan to purchase a gift card for an employee or colleague. In that case there are gift cards that can be used anywhere or at several different businesses. Banks and credit card companies offer gift cards that can be used anywhere. You do have to be careful because they will sometimes charge you a fee to purchase the gift card and there may also be fees taken off the balance of the card when it is used. These cards normally have an expiration date and may have money deducted monthly when not used.
The gift cards offered by a mall or a company owning several different restaurants or businesses can be a good choice for giving to those you don’t know well. These types of cards will sometimes have promotions where if you spend $25 you get $30 on the card.
Tip Five
With any gift card, you need to know and understand the rules and regulations governing this specific card. Until August 2010 there haven’t been any federal laws that regulate gift cards in the US. Each different card issuer has set their fees, charges, and expiration dates.
The new federal law will mandate that all gift cards have a life of five years. It also states that there can be no fees assessed on the card balance if the card is used within the first 12 months. This doesn’t mean they can’t charge a fee when you buy the card, just that no fees can be taken off the card for the first year. If you have gift cards that were issued before August 2010, use it. There are some that may become null and void when the new regulations go into effect.
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The most popular thing to give as a gift is, believe it or not, a gift card. They’ve become so popular because of the convenience. After all, you don’t have to worry about sizes or colors or how much it will cost to send it.
For most people the cards are a joy to receive. They get to pick their choice of what they want. That is if they remember to use it! A large number of cards are never used. People forget they have them or they don’t have them with them when they are ready to buy.
One thing to remember when you receive a gift card, use it right away while you have it in your mind and hopefully in your wallet. Cards do expire and some have fees if they are not used in a timely manner.
News – New Law
There is a new law in the US that comes into effect in August 2010 that gives all gift cards a life of five years. This new law insures that no fees can be assessed if the card is used within the first 12 months. If you have gift cards that were issued before August 2010, use it. There are some that may become null and void when the new regulations go into effect.
Information – Sell the Gift Card
Now if you simply hate gift cards and don’t want to be bothered using them, you can sell them. Of course, the card value is discounted when you sell them. This buying and selling of gift cards is a business and the discounted value is how they make money on this service.
The cards must have a minimum value of $25 to be considered for sale, and the price you can get will depend on where the card can be used. For example, a Visa gift card that can be used anywhere that accepts Visa cards will be worth more than a card that can only be used at say, Starbucks.
The amount of the card will also influence the amount of the reseller’s discount. One place to check out reselling gift cards is called Plastic Jungle. You can find this card reseller on the internet at www.PlasticJungle.com. They pay approximately 85% of the gift card’s value.
There are other places on the internet where you can sell your gift cards; search for gift card reseller. You can also buy gift cards at a discount from these resellers. Just be sure and check the expiration date and terms for each card. The advantage of buying from a reseller is that you can save anywhere from 13% to 30% of the card value.
Information – Points And Discounts
There are several places that will give you award points for buying gift cards, and then you can spend those award points to buy merchandise from that business. Amazon.com is one business that does this.
Another popular benefit for buying gift cards is an upfront benefit from some businesses. Many restaurants do this, but the practice is spreading to other businesses as well. This benefit comes when you buy a gift card for a certain amount, but the value of the card will be worth a greater amount. Say you spend $25, but the gift card is actually for $30. Some restaurants will give you the $25 card and an extra $5 card. The marketing behind this is to buy a gift card for a friend, and keep $5 for you to use.
One thing to consider, if these types of bonuses are offered at a place you dine or shop at regularly, buying gift cards to use for yourself might be a way to save money and if you are buying a gift card for someone else, it’s a great way to spend within your budget – but give a more expensive gift.
Information – Treat Them Like Cash
One big thing to remember about gift cards is they should be treated just like cash. If you lose the card or it is stolen, it’s your loss. Also, whether you’re the buyer or the receiver of the gift card, ask about and understand the terms and rules governing the card. Sometimes there will be a website on the card that allows you to look up this information.
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Believe it or not gift cards have been used as far back as 1916. Now they are the most sought after gift by women, and the third most sought after gift by men. We’re talking in terms of over $80 billion dollars in sales a year in the USA alone, with the UK hitting over $3 billion, and Canada over $2 billion. Gift cards are available for nearly every business you can name, from Starbucks to Target to the high end boutique stores and restaurants.
Types of Gift Cards
Gift cards come primarily in two types, called open loop and closed loop cards. Open loop is generally issued by a bank or a credit card company and can be used in any number of different businesses. A closed loop card is issued by the company where the card will need to be used.
There is a third type of card known as a hybrid closed loop. This type is issued by a provider. But it combines several specific businesses together on one card. One example of this type of card would be a gift card issued by a shopping mall. The card could then be used in all the mall stores.
Some gift cards are bar coded and linked to a specific person by name and have the amount of the card listed on the card. Other cards are magnetic strips, have no name linked to the card – so it can be used by anyone and the card doesn’t have the amount listed on the card, it appears only on the company’s data base.
Gift cards can sometimes look like a regular credit card, but most are plastic cards resembling credit cards in size and shape, with a specific message, such as Happy Birthday or Merry Christmas. They can also carry a special message or company logo on the face of the card. This type of gift card is often used for awards or a thank you from an employer to their employees.
Personalized or customized gift cards have become more accessible for individual use also. This personalization is believed to make giving a gift card an easier choice and a more thoughtful gift.
Buyer Beware
One disadvantage to using a gift card is the wide range of rules and restrictions placed on some of the gift cards. You need to be very careful when buying a gift card because the company issuing the card is in control of those restrictions. There are no overall rules and regulations governing fees and guidelines for gift cards.
The US has no federal regulations on gift cards. Individual states have some rules or guidelines that apply to the cards and what rules are out there vary from state to state. Canada, however, has banned expiration dates and fees related to gift cards.
Some of these rules and restrictions can include what really amounts to penalties. You need to make sure the card doesn’t have an expiration date. Yes, even though it’s all paid for, it can expire. It can also decrease in value over a period of time, which is the same as charging interest in my book, and some gift cards come with a “non-use” fee.
The issuer of the card can charge administration costs, and restrict the use of the card, pretty much at their own whim. Another thing that can get scary is an issuer can change their rules without notifying the customer. In other words they could add an expiration date without letting the buyer or the receiver of the card know about the change.
So be careful when you purchase a gift card, read the fine print and know what you are getting.
Companies like gift cards. The statistics report that about 10% of all gift cards issued are not claimed, or used. The reasons for them not being used can vary from the receiver not liking or having access to the store or business where the card needs to be redeemed, to loss of the card, or card holders forgetting about the card until it is expired.
All this amounts to nearly $8 billion dollars paid out to companies in the US each year that doesn’t get redeemed. Another way of looking at that might be-money thrown away, or lost.
If you are given a gift card, you need to make sure you know if there is an expiration date, treat it like cash, and utilize it as soon as possible.
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Many consumers have been hearing about new laws regarding gift cards that will take effect this year (2010). The laws will put limits on fees that can be charged by gift card issuers as well as on expiration dates that can be placed on the cards. But what effect will these laws have on gift cards that are issued by single stores?
The answer, in almost every case, is none. The reason is that gift cards that have been issued by a major retail store do not typically have an expiration date or charge any fees. Of course there are exceptions, but in the large majority of cases, this type of gift card is free from such limitations.
Where the big changes will be seen is with gift cards that can be used at a variety of retailers. Traditionally, it is these cards that carry the shortest expiration dates and the heftiest fees. The new laws were created in order to answer the complaints of consumers who said that they felt such fees and expiration dates were unfair.
As all types of gift cards continue to grow in popularity, the issuers of the cards are seeing an increase in their profits from them. The reason is that, by some estimates, as much as ten percent of the dollar value sold in gift cards each year is never used.
Even with the new laws taking effect this year, it is likely that there will still be millions of people who never use the gift cards that they are given as gifts. Below are some tips for making sure that gift cards that you give as gifts are both appreciated AND used.
Store Gift Cards
While the appeal of a card that can be used anywhere is obvious, remember that it is this type of card that usually has high fees and expiration dates. While a store card can only be used at one store, it is almost always free from such fees and expiration dates.
For those reasons, a store gift card can often be a superior choice. Of course, before you give someone a store gift card, you should know for sure that the person receiving the card enjoys shopping there.
Give Them All the Information
Before you give anyone a gift card, you should be aware of all expiration dates and fees. You should then pass this information on to the receiver of the card. A simple note tucked in a card such as “Enjoy! Card expires in six months!” is sufficient.
Many who receive a gift card may be unaware that there is any expiration date and find out the hard way when they try to use the card only to learn it has expired.
If you provide all of the information along with the card, the receiver will be more likely to use the card in time.
Is There a Store Near Them?
Another mistake some gift card givers make is to give a store credit card to someone who lives far away without checking that such a store is located near them. For major retailers, you can usually search stores online. For smaller retailers, you may have to call. Either way, it is certainly worth the few extra minutes it will take to make sure that the recipient will actually be able to use the card.
While gift cards remain extremely popular, many people are moving back to the old standby for non-gift gifts: cash. Some do this because they know the recipient is far more likely to actually use their cash gift than they would be to use a gift card.
Still, gift cards are not going anywhere. They were the number one gift given during the Christmas season for the last several years. With the new laws in place that make the cards even more user friendly, it is unlikely that their popularity will wane anytime soon.
Just be sure that you are aware of any expiration dates and fees associated with the card. If you are the receiver, call the card issuer as soon as possible to learn of any possible fees so that you can get the most out of your card.
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