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Are you purchasing gift cards this holiday season? If so, beware of fees attached.
The Gift Card Federal Law Act, passed in 2010 has improved consumers’ chances of getting full value out of the cards they buy or give, but there are still things to look out for. Here are some facts from BBB:
· Money on a gift card cannot expire for at least five years from the date the card was purchased or the last date any additional money was loaded onto the card.
· Inactivity fees can be charged only after a card hasn’t been used for at least one year, and you can be charged only once per month. But you may be charged a fee to buy the car or replace a lost or stolen card.
· The expiration date on a card must be clearly disclosed on the card, and fees must be clearly disclosed on the card or its packaging.
· There is no limit on monthly fees a company can charge after a card has been inactive for a year. The issuer has to tell you about it, so ask when you buy a card.
· The actual card may expire before the five-year redemption period for a card. In other words, if the card is expired but it still has value, you may have to ask for (and possibly pay for) a new card. Look for expiration dates when you buy cards.
· If you give a friend a card and they want to shop online rather than in a store, make sure it’s good for that. Some cards have limitations on where or how they can be used. Look for the fine print on the packaging of the card when you buy it.
Tips for buying gift cards:
· Buy from sources you know and trust. Avoid buying gift cards from online auction sites, because the cards may be counterfeit or may have been obtained fraudulently.
· Read the fine print before you buy. Is there a fee to buy the card? If you buy a card by phone or online, are there shipping and handling fees? If you don't like the terms and conditions, buy elsewhere.
· See whether any fees will be deducted from the card after you purchase it.
· Inspect the card before you purchase it. Verify that none of the protective stickers have been removed. Make sure that the codes on the back of the card have not been scratched off to reveal a PIN number. Report any damaged cards to the store.
· Give the recipient your original receipt so they can verify the card's purchase in case it is lost or stolen.
· Consider the financial condition of the retailer or restaurant. If you buy a card from a company that files for bankruptcy or goes out of business, the card may be worth less than you had anticipated. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A company that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the company or its competitor to find out. Even if the company is not redeeming gift cards now, check back with them periodically; they may start redeeming cards at a later date.
For more consumer tips, go to www.bbb.org or call 1-800-388-2222.