Biz Bulletin: Check the fine print for holiday gift cards

Biz Bulletin: Check the fine print for holiday gift cards

November 30th, 2012 by By Jim Winsett in Business Diary

BBB Chief Exective Jim Winsett

BBB Chief Exective Jim Winsett

Photo by Leigh Shelle Hunt

Q: I plan to be simple this year, and buy each person on my holiday shopping list a gift card. But I know some gift cards come with fine print attached to them. Does the BBB have advice on buying gift cards?

A: With the holiday season under way and the economy putting the squeeze on budgets, many shoppers are going to be looking for the best gift options this year. For those looking to give gift cards to family and friends, BBB is recommending that you do your research before purchasing a gift card.

In 2011, BBB received hundreds of complaints against the gift card industry. In some cases, consumers are disgruntled when they are given an expired gift card with loaded cash that is not usable until the expiration date is corrected. After sending the expired card in for replacement, the consumer is left empty handed when the card fails to ever return to them.

Consumers need to be on the lookout for gift cards that appear to be "open" or out of their original package, and also cards that state an expiration date that is coming up or that has already passed. Shoppers should be wary of online auction sites that promise "full value guaranteed" gift cards. It is sites like these that are prone to selling old, valueless cards that leave the gift giver and receiver distraught.

BBB recommends the following tips for both givers and receivers of gift cards:

• Know the rules. The latest federal rules that took effect in August of 2010 are designed to protect consumers by restricting fees and affecting gift card expiration dates. These new rules apply to two types of cards: Retail gift cards, which can only be redeemed at retailers, and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express, Visa, or MasterCard and can be used wherever the brand is accepted.

• Check it out. Make sure you are buying from a known and trusted source. Always check out a business at Avoid online auction sites, because the cards sold there may be counterfeit or may have been obtained under fraudulent practices.

• Read the fine print before buying. Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?

• Inspect the card before buying it. Verify that no protective stickers have been removed, and that the codes on the back of the card have not been scratched off to reveal a PIN number. Report any damaged cards to the store selling the cards.

• Provide the gift card receiver with back up. Give the recipient the original receipt in case the card is later lost or stolen. Also, before you buy retail gift cards, consider the financial condition of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the business or its competitor to find out if they are redeeming the cards, or if they will do so at a later date.

• Treat the gift card like cash. For receivers, it is important to report lost or stolen cards to the issuer immediately. Some issuers will not replace cards that are lost or stolen, while other issuers will, for a fee. Make sure to use gift cards as soon as possible, because it is not unusual to lose or forget about them.

Get answers to your questions each Friday from Jim Winsett, president and CEO of the Better Business Bureau Inc., which serves Southeast Tennessee and Northwest Georgia. Submit questions to his attention by writing to Business Editor Dave Flessner, Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN, 37401-1447, or by e-mailing him at dflessner@