Tips on getting the most out of gift cards

Michelle Singletary
Columnist November 26, 2013

I get a lot of gift cards, and I bet you do, too.

Since it’s often hard to buy for people, our friends and relatives have resorted to giving us these cards. Once seen as the lazy person’s go-to present, gift cards have become a practical and acceptable way to give.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

This holiday season, eight in 10 consumers plan to buy gift cards, according to an annual survey by the National Retail Federation. Shoppers are expected to spend an average of $163.16 on gift cards, the highest amount in the survey’s 11-year history. The gift-card market is estimated to top $130 billion in sales by 2015, according to research by CEB TowerGroup.

Since 2010, gift certificates, store gift cards and general-use prepaid cards have come with some pretty good protections, thanks to the Credit Card Accountability, Responsibility and Disclosure Act of 2009, also known as the Credit CARD Act.

So as you begin your holiday shopping — some of you before Thanksgiving dessert is served — here are some tips for people who give or receive gift cards:

●Expiration dates. The money you load on a gift card is good for at least five years from the date the card was purchased, and any money that might be added to a gift card later must also be good for at least five years.

Tip: A friend gave me a gift certificate for a chain restaurant. I put away the certificate for safekeeping until a special occasion when I might go to the pricey restaurant. The problem is, I forgot about it. I recently found it as I was organizing my office. But thanks to the Credit CARD Act, I had a really nice meal several years after I got the certificate.

To eliminate the possibility of losing gift cards, create a file folder and put the cards in it immediately after receiving them.

Leftover money. A gift-card recipient can get a replacement card, even if the original has expired, if there is money left on it. You can request a replacement at no charge, according to the Federal Reserve.

Tip: When you give a gift card, make an effort to highlight the expiration date, which is often in small print on the back of the card. If the person you are giving the card to is like me, he or she might want to save it for a special occasion to honor your thoughtfulness. But like me, he or she might tuck it away somewhere and forget about it.

Fee limits. I hate to admit it, but I’ve lost the value of gift cards because of fees. However, many fees are limited because of the Credit CARD Act. Generally, fees can be charged if you haven’t used your card for at least one year. Restrictions apply to maintenance fees, inactivity fees, usage fees or fees for adding money to a card.

Often general-purpose gift cards will charge a monthly fee after 12 months of inactivity. Gift cards issued by banks, malls and credit-card companies are more likely to have expiration dates or activation, maintenance, inactivity and transaction fees.

Tip: Understandably, if you want to give someone the maximum flexibility to shop at any store, you might buy a general-purpose gift card. But, again, help people out by pointing out any fees that could be assessed on this type of gift card. Just include a little note or sticker that lists the date at which fees will be assessed. After all, if recipients don’t use the card, it’s money wasted.

If you get a gift card, be careful that you don’t overspend when you redeem it. A survey last year by the TowerGroup found that 30 percent of gift-card recipients spend $25 more than the value of the card.

Oh, and I love this tip from Card Hub: If you have an old gift card that’s still good, but it’s looking a bit worn, check to see whether you can trade it in for a new card. Regift the card if you’re looking for a present for someone. But make sure the full value is displayed on the front of the card.

Why would someone regift a gift card?

Perhaps the card is from a store that the original recipient doesn’t patronize. As long as the gift card is for a service or store the regifting receiver would like, I don’t see the problem. Think of it as recycling. Besides, I won’t tell, and neither should you.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.
com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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