Gift cards are the go-to gift for many during the holidays. For those who are hard to buy for, a gift card may be a simple solution. They are easy to mail, easy to find and don’t need wrapping. People like to receive them. Surveys show that fully 60 percent of folks say they enjoy receiving gift cards.
Nearly half of holiday shoppers plan to give gift cards this year, according to Consumer Reports.
It’s not hard to understand why retailers love to sell gift cards.
Consider this statistic: Over $41 billion worth of gift cards went unused from 2005 to 2011. Estimates from the National Retail Federation are that shoppers will spend over $28 billion on gift cards during this year.
The Better Business Bureau advises that, in spite of the many upsides to giving gift cards, consumers should take precautions when buying and receiving them.
Here are some tips to consider when buying or receiving gift cards:
One scam that has been reported lately involves gift cards sold on large racks in some stores. Photos are taken of the back of the card where there are activation codes and a customer service number to call when checking on a card’s value. Scammers then replace the card on the rack. They make purchases online with the information obtained. An unsuspecting legitimate user of the card is later surprised to find out that is has little or no value.
Under federal law, gift cards cannot expire for at least five years. You cannot be charged a fee if you have used the card within the past 12 months.
A proposed Gift Card Consumer Protection Act in the U.S. Senate would ban gift card expiration dates and non-use fees. Companies filing bankruptcy would be denied the right to sell gift cards and would have to honor any unredeemed cards.
If you’re among the millions who will give or receive a gift card during this holiday season, enjoy the convenience but consider the strings that may be attached.