Looking Gift Cards in the Face

By: AARP Education & Outreach | February 26, 2009

When you can't find the perfect gift for someone, a gift card can be the best solution. According to one survey, gift cards were what women most wanted . With a gift card you know your friends can pick out just what they want. But gift cards can have some drawbacks. It's the fine print that may make your gift less than you had hoped for.

Gift cards can have expiration dates, fees and other terms that reduce their value. There can be restrictions on where and how the cards can be used. Lost or stolen cards are often gone for good.

The Office of the Comptroller of the Currency reports that consumers lost $8 billion in 2007 by not using the gift cards that they received. This is out of the projected $26 billion spent on gift cards.

Before buying any gift card, read the fine print to see when the card expires and any conditions on its use. Check for any fees that the recipient might have to pay when trying to cash in on the gift. Are there restrictions on where the card can be used, such as only for online purchases? See if you can get your money back if the card is lost or stolen. Is there a toll free number to call if either of you have problems with the card? Look for a web site on the packaging where you can get more information about any restrictions or directions.

You should also be cautious about purchasing a gift card from a public display rack. There have been some reports of thieves tampering with the packaging to steal the serial numbers or insert counterfeit or used cards. The best practice is to have the store clerk scan the card to check the value before you make your purchase. And keep your receipt in case any problems develop.

 Take Action

• Read the Consumer Advisory on gift cards from the Office of the Comptroller of the Currency.
• Be sure you are using safe practices when you shop online.
• Consumer Reports says gift cards have nine "gotchas."
• The Federal Trade Commission reports on the strings attached to some gift cards for both the giver and the receiver.