Gift Card Frustrations
Nearly everyone gets a gift card or two come the holiday season, but a lot of gift cards these days come with a lot of hassle. From paying to replace cards to the possibility that the card won’t work when you arrive at the store, here are ten things to watch out for when purchasing, or purchasing with, gift cards.
1. You have to pay to replace a lost card.
Consider yourself lucky. Many gift cards can’t be replaced at all. Losing it is like losing a wad of cash. Finders keepers. For those that can be replaced, fees are typical.  Some of the more generous issuers will replace the card at no cost if you can show a receipt or statement proving that you purchased it.
2. It costs you part of your card’s worth to get cash.
Cards that are issued for specific stores or restaurants cannot be exchanged for cash, but now bank-issued gift cards are commonplace. Since they are just like cash, and can be used anywhere, can’t you just take it to the bank and get the cash instead? Yes… usually. It’s going to cost you a fee though, and that fee may be around $15. For a $25 gift card, is it really worth it?
3. Your card is losing value.
If you don’t use your gift card right away, it is likely to start dwindling. Many issuers charge a monthly fee after the card has been on the market for six months. Some of these issuers charge this fee whether or not the card is still in use. Again, these fees can be steep, and when you go to use the money on your card, there may be no money to use.
4. Your gift card is expiring.
Some gift cards have expire for good. After the date listed for the card, it cannot be used, no matter how much money is remaining on it. Some cards that don’t actually expire still have an expiration date. The money is there, but it can’t be touched until the issuer sends you a new, unexpired, card. Some issuers even charge for this service.Â
5. You’re charged a fee every time you use the card.
If you have a bank gift card that allows cash withdrawals, you will likely be charged a fee whenever you use an ATM. One card, the Visa Gift Card from GiftCards.com charges a 35 cent fee with every purchase.Â
6. The card has value, but no one will take it.
Any retailer, such as a gas station, car rental place, or hotel put a “hold” on your card to cover what your total bill may be. Some gas stations are placing holds as high as $100 on cards.  If your card doesn’t have the amount of the hold remaining, it will reject. And if it does accept at the gas station, be careful using it. If that hold is still on the account, the card will likely be rejected by other merchants.
7. You can’t use the card anywhere.
Bank-issued gift cards often cannot be used at ATMS, gas pumps, or for purchasing airline tickets. And if you think that store-issued cards are easier to use, think again.
The American Airlines gift card can’t be used through travel agents, at ticket counters, or for flights originating outside of the U.S. Starbucks’ gift cards are not accepted at all Starbucks’ locations, like airports and bookstores.
8. The card’s Web site says that gift cards can’t be sent to your state.
Connecticut, Hawaii, New Hampshire, Vermont, and Rhode Island have all banned or limited fees and expiration dates on gift cards in an effort to protect consumers in their states. So some issuers will not sell cards in those states.
9. You find it difficult to spend the last few dollars on the card.
This should be able to be remedied by using two forms of payment, but this type of transaction continues to be problematic when it comes to bank cards. The likelihood that you will lose the last couple of dollars is fairly high.
10. The card has already been used.
Last year was an especially bad year for people who received gift cards from certain stores, like Wal-Mart, where cards sit out. Many of the cards were used before they were even given as gifts by people who stole the card numbers and codes and made online purchases with the information. By the time the recipient of the real card made it to the store, the card was already used up.
The best remedy for this is to purchase over-the-counter cards only.
A majority of states have passed gift card restrictions, limiting fees and dictating expiration dates. To find out what the law is in your state, go to www.ConsumersUnion.org/finance/StateGiftCard.
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