To ‘gift card’ or not to ‘gift card’? While masters of etiquette may disagree with the notion, gift cards can be incredibly convenient and increasingly appreciated. Whether that name on your list is simply difficult to choose a specific gift for or you see the practicality of giving a gift card, you should know that you are not alone.
According to the National Retail Federation, a full eighty percent of holiday shoppers plan to buy gift cards this year, an increase from 77.3 percent in 2010. During the holidays, a total of $27.8 billion will be spent on gift cards in the U.S. That’s an average of $155.43 spent on gift cards per shopper.
Whether you’ve already purchased gift cards this season – or still have some left to go, there are a few tips you should know before buying.
1. Shop around and search online first. Before paying full retail price for a gift card, check to see if there are any discounts available. Getting a free meal for yourself when you buy a gift card to a restaurant, getting a free gift card for yourself to a retailer, or getting as much as 20% off are pretty common perks.
You can always find a great deal online as well. You’ll find new and partially used gift cards being sold online by people who have no desire to redeem said gift cards through a number of online exchanges. The most popular sites are: plasticjungle.com, cardhub.com, cardpool.com, giftcardcastle.com, and giftcards.com. Get a stinker of a gift card? These sites are a great place to ‘return’ your gift card for cash.
2. Consider post-Christmas sales when choosing a gift card. Your recipient may get the best deal of all if the gift card is for a location that has great after-Christmas sales. Despite all the excitement over Black Friday, Cyber Monday, and amazing online deals and door buster deals, the best deals of the shopping season will likely happen immediately after the official season is over: December 26th. If they have a gift card in hand, they’re likely to come out a big winner by the time the post-Christmas clearance deals thin out.
3. Maybe not everyone on your list should get a gift card. Consumer groups estimate that ten percent of gift cards are never redeemed. Retailers love this statistic – but you can make sure this doesn’t happen to your gift recipient by choosing a card that will not be too difficult for your friend or family member to redeem. You’ll also want to ask them about their card later – particularly if they are a procrastinator. What we don’t want to happen is a card to get misplaced. But, even then, we may have some recourse…
4. What happens if the card goes missing? Hang on to the receipt! Contact the retailer immediately. Most gift cards will have a toll-free number you can call. Give them what information you have from the receipt and they can likely cancel and reissue you a new card. If it’s a traditional store card, you typically won’t be required to pay a replacement fee. Bank issued gift cards may charge a $5 to $15 fee. If you don’t have the receipt but have a copy of the gift card number, you may still be in luck. Contact the retailer to see if you can still use the card number, or have a new card issued to you.
If you lose the receipt and the card, you’re probably out of luck – unless you can work with your credit card company with whom you made your original purchase of the gift card – in cases where you never received the gift card when purchasing.
If you receive a gift card for Christmas (and statistically, you will!) many retailers will allow you to register your gift card on their website. Do this! This may provide additional protection – and possibly some additional perks like discounts.
5. What about re-gifting gift cards? Should you give a scratched-up Taco Bell gift card that’s been at the bottom of your purse for the past six months. I’m no expert on etiquette, but I wouldn’t advise it. One option may be to go to the retailer or restaurant and have them reissue the gift card on shiny new plastic. You can also break up the value into smaller amounts, merge existing cards, or ‘top off’ a card that may be at an odd amount. This tip comes in handy when buying discounted cards online – as odd amounts are commonly available.
6. What about fees, restrictions, and expiration dates? Thanks to the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, store-issued gift cards cannot expire for five years. However, if there is no activity on the card for a year, you can be charged a dormancy / non-use fee. You can also be charged a fee when purchasing the card or replacing it – although this is rare. Keep in mind that bank issued cards (co-branded with a Visa / MasterCard / American Express logo) are not subject to the same rules, and you’ll want to read the fine print before purchasing. Also, if a retailer were to declare bankruptcy, its a possibility that you may lose the full value of your card depending on the type of bankruptcy the retailer went through.
Whether or not your gift giving includes gift cards, I hope you have a magical Christmas. 2012 is straight ahead and I’ll be working throughout the year to help you keep more of your own money at the grocery store and everywhere else your money goes on a regular basis.