Consumer Alert: Gift Card Tips

Giving gift cards for the holidays can be the perfect answer to finding a present for that hard-to-shop-for relative or friend. However, the Governor’s Office of Consumer Protection wants consumers to be well informed so that the gift cards they give and receive are worth what the buyer intended.

First, beware of gift card scams. Con artists have been known to record gift card numbers and obtain PIN codes by removing the protective coating. Then they keep checking online to see if the card has funds on it. Once the card is purchased by the consumer, the card is activated and the scammer will be able to make an online purchase using the gift card funds. When the legitimate owner of the gift card subsequently tries to use the card, he will discover that there are little or no funds left on the card.

Another common scam is when someone resells a gift card, usually via an online auction or website, claiming it has a higher value than it actually does. Consumers should therefore avoid buying gift cards from online auctions or resellers because they could end up with a stolen card or one whose funds have been used up. Your safest bet is to buy the gift card from the store it’s from. Even then, you should check to make sure that the PIN number has not been tampered with; if it has, ask for another card and explain why. You should also ask the salesperson to scan your gift card to make sure that the funds have been correctly loaded onto the card.

Save your receipt because if the card is ever lost or stolen some stores may be able to give you a replacement card.

Also, you should consider the reputation of the company whose gift card you are buying. If it is lesser known or on shaky financial ground, there is a possibility that the company could go out of business. If that happens, your gift card could end up being worthless.

That’s an important consideration for gift card recipients as well. The best protection recipients have again a company going out of business is to use the card sooner rather than later. You may want to do that anyway since many people who don’t use a gift card right away end up forgetting about it, which can lead to the card expiring or incurring inactivity fees.

Gift card recipients should also take note of the following new rules which offer greater protections for consumers:

-Money on a gift card cannot expire for at least five years from the date the card was purchased, or from the last date any additional money was loaded onto the card. If the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost.

-Inactivity fees can be charged only after a card hasn’t been used for at least one year, and then only once per month. But fees may be charged to buy the card or to replace a lost or stolen card.

-The card must clearly disclose its expiration date, and the card or packaging must clearly disclose any fees. There is one exception: Some cards produced before April 1, 2010, that list a short expiation time or inactivity fees in the first year may be sold through January 31, 2011. However, no matter what a card says, consumers still are protected by the new rules.

Categories: Money

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