Q. I plan to purchase gift cards for many of my Christmas gifts this year. Some cards are better than others; some having high purchase fees, expiration dates, etc. Does BBB have advice on gift cards?
A. Gift cards can be a convenient gift-giving solution for the relative or friend who is hard to please or who lives far away. Better Business Bureau advises consumers to check the fine print on gift cards and make sure security seals are intact before buying them for holiday gifts.
Consumers find gift cards an easy way to shop and love to give — and get — gift cards. But buying cards with too many fees or conditions can erode their value. You may be better off giving cash or a check instead of a gift card.
Gift card sales are expected to exceed $131 billion this year, with a third of sales occurring during the holiday season. More people see them as an attractive way to remember loved ones while avoiding the hassle of finding the right size or saving on shipping costs. According to the National Retail Federation six out of 10 consumers say they like to receive gift cards. However, more than $2 billion in gift card value goes unused every year.
The Credit Card Accountability, Responsibility and Disclosure Act, which took effect in 2010, provides some protections to consumers who receive gift cards, such as requiring that card balances remain valid for five years after issuance or after they were last loaded with money. Fees and expiration dates may still apply however, and fees can erode the value of the cards.
BBB received more than 700 complaints about gift card purchases last year, and some consumers have reported problems with sites that sell gift cards online. Some online retailers offer gift cards that can be delivered directly to the recipient. BBB encourages consumers to be sure that the websites where they buy gift cards are secure.
Check for any limits on how the cards may be redeemed. A secure website will display "https://" in the website address of the pages where a shopper enters payment information.
If a BBB Accredited Business seal displays, click on the seal to confirm that it is authentic. A valid seal will link to the business BBB Business Review Report.
BBB offers the following tips on buying gift cards:
' Be cautious about buying gift cards from online auctions because it is virtually impossible to tell whether the cards have any value remaining. It is also difficult to determine whether they have been tampered with, or to see if they have expired.
' Check the packaging and any security seals when buying gift cards in a store to be sure they are intact and have not been compromised.
' Check the fine print to see if there are fees associated with the card. Some typical fees could include transaction fees or inactivity fees. In some cases, an organization may charge a service fee to issue the card or a replacement card.
' See if the card has an expiration date. In some cases, the gift card may expire before the five-year redemption period. Are there fees to obtain a new card?
' Check the terms and conditions on a gift card. If you are giving a card to a friend who wants to shop online, make sure the card can be used in an online transaction and not just in a store.
' Consider the financial condition of the retailer or bank issuing the card. If you think the store may be on shaky footing, you may want to pass on buying a card.
To review other consumer and business tips, visit bbb.org.
Jim Winsett is president of the Better Business Bureau in Chattanooga.