Provided by the Bucks County Department of Consumer Protection:
Q. As they are getting older, my children, as well as my nieces and nephews, seem to request gift cards to various retailers instead of asking for a specific gift for the holidays. Is there anything I need to know about buying gift cards before I do my shopping using this method for gifts? – G.K., Souderton
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A. Although gift cards are the most-requested, noncash gift, giving a gift card does come with drawbacks that you should consider. They can be thought of as cash but with strings attached.
There are purchase fees attached to gift cards. This is especially common for bank cards, which can be used at most merchants, which display a credit card logo. For example, you may pay $4.95 to purchase a Visa Gift Card in addition to the amount you choose for the gift.
Although funds loaded onto a gift card cannot expire within five years of being purchased or new money loaded (thanks to changes in regulations) “Dormancy” fees can be charged. If the balance of the gift card is not used within twelve months after purchase and beginning in the 13th month after a card was last used, issuers are allowed to begin charging dormancy fees. These fees are common for bank-issued cards and could be $2.50 a month or more.
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Issuers of these cards are not required to offer replacement cards if it is lost or stolen, however some issuers, common with merchant issued cards, will replace a card for a fee.
Another thing to keep in mind when purchasing gift cards is that any questionable purchases (errors or even fraud) made are not disputable as would be if you were using your own credit or debit card.
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If you must give a gift card, check out the terms carefully and include a receipt.
For more helpful consumer tips and brochures please visit us at http://www.buckscounty.org/government/CommunityServices/ConsumerProtection/ConsumerTips
