The holiday season is in full swing and many shoppers are looking for the best gift options. For those giving gift cards to family and friends, the Better Business Bureau serving Central Indiana recommends consumers do some research before purchasing.
BBB receives numerous complaints each year involving the gift card industry. One scheme occurs when a scammer obtains the numbers from the back of the gift card by removing the protective stickers and records them. Then the purchaser buys the gift card, and by the time the recipient uses the gift card, there are no funds on it. The scammer has already used the funds.
“Consumers need to be on the lookout for gift cards that appear to be ‘open’ or out of their original package and cards that state an expiration date that is coming up or that has passed,” BBB president/CEO Tim Maniscalo said in a press release. “Shoppers should be wary of online auction sites that promise ‘full value guaranteed’ gift cards. It’s sites like these that are prone to selling old, valueless cards that leave the gift giver and receiver distraught.”
BBB recommends the following tips for both givers and receivers of gift cards this season:
• Know the rules — Federal rules that took effect in August 2010 are designed to protect consumers by restricting fees and addressing gift card expiration dates. These rules apply to two types of cards: retail gift cards, which can only be redeemed at select retailers and restaurants; and bank gift cards, which carry the logo of a payment card network like American Express, Visa or Mastercard and can be used wherever the brand is accepted. The money on gift cards can’t expire for at least five years from the date of the card purchase or when the last date of additional money was loaded.
• Make sure you buy from a known and trusted source — Always check out a business online at indy.bbb.org, and look for Accredited Businesses you can trust. Buy from sources you are familiar with, and avoid online auction sites; cards sold there could be counterfeit or fraudulently obtained.
• Read the fine print before buying — Is there a fee to buy the card? Are there shipping and handling fees for cards bought online or by phone? Will any fees be deducted from the card once purchased? Are there inactivity fees? If so, when do they start and how often will they take effect?
• Inspect the card before buying it — Verify that no protective stickers have been removed and that the codes on the back of the card haven’t been scratched off to reveal a PIN. Report any damaged cards to the retailer. If possible, ask for a card from behind the counter. These gift cards are hidden from people who could possibly take the number off the back of the card.
• Provide the recipient with backup — When giving a card as a gift, include the original receipt in case the card is later lost or stolen. Before you buy retail gift cards, consider the financial condition of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the business or its competitors to find out if they currently redeem the cards, or if they will do so at a later date.
• Treat the gift card like cash — Report lost or stolen cards to the issuer immediately. Some issuers will not replace cards that are lost or stolen while others will, but often for a fee. Use your gift cards as soon as possible; it’s not unusual to lose or forget about them.