Got Gift Cards? What You Need To Know

Gift cards have become a popular alternative to shopping for items that recipients may not need or want. Much like giving cash, they allow your friends or family to shop for their own present rather than having to go to the trouble of returning unwanted items for something more desirable (without the stigma of tackiness that is often associated with cash gifts). In short, gift cards are easier and often more appreciated than merchandise for both the person giving the gift and the one receiving it. However, there can be unanticipated problems if you don’t read the fine print. Here are just a few things you need to watch out for when you give a gift card if you want to ensure that the recipient has no problem using it.

For starters, you should ALWAYS get a receipt when purchasing a gift card. Unlike other presents, it doesn’t really matter if the cost is on the sales slip because you will likely write the amount on the card before handing it over. Problems with the computer, the card reader, or the card itself could easily render the plastic useless. So unless you want your recipient to try to buy something only to find the card defunct, you should include a receipt so that they have proof of purchase as back up. It doesn’t cost you anything to slide it in with the card and it could save friends and family frustration and embarrassment when they go to cash in on their gift.

Further, you should always read the terms laid out by the company you purchase a gift card from if you want to avoid hidden fees and scams. For example, many cards come with hidden fees that you may not know about until it’s too late. Some retailers bank on the fact that people are going to stuff gift cards in their wallets and forget about them. To this end, they may have a monthly fee that is deducted from your gift card for every month it goes unused, or a per-use charge for each transaction, eventually devaluing your gift or whittling it down to nothing.

Or it may come with an expiration date a year down the road. You should ask before buying if the company from which you are purchasing the card includes any of these types of fees or restrictions since you will certainly want to warn the recipient (or spend your money elsewhere). In addition, be sure to choose a store that is a national (or international) chain and has sound financial standing. If the company goes under, the gift card is worthless.

As for scams, there are a fair number of these to watch out for, as well. For example, many people who buy gift cards from kiosks may give their gifts only to find that the money has mysteriously vanished. Crooks are writing down the numbers from cards on display, then checking them online and using them once a balance becomes available. For this reason, it’s better to ask for a card directly from the clerk (they almost always have extras behind the counter). You should also avoid buying gift cards online from anyone other than the retailer (since fake cards may be sold on auction sites like EBay) and if you see a deal that looks too good to be true, it probably is (as with people offering to sell a gift card they received for only a fraction of the value because they would rather have the cash).

In short, always go to the source, read the fine print, and get a receipt. By following these simple steps, you can avoid getting hit with hidden fees and restrictions or becoming the victim of a scam when you attempt to give a thoughtful gift to friends and family.

Sarah Danielson writes for Purchase Order Finance which helps small businesses find the working capital they need for big business opportunities.