Gift cards may seem like a simple solution. But many of the cards have so many strings or fees that they are far from a good deal.
If you purchase a gift card for a company based out the United States be informed that recent changes in federal law have improved consumers’ chances of getting full value out of the cards they buy and give. The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which took effect in 2010, also applies to gift certificates, store gift cards and general use prepaid cards, which are often branded by payment networks, such as Visa or MasterCard.
Consumers will now have at least 12 months – a full year – to use the cards before they lose value. And the cards keep their value for five years after purchase, or from when you last added money to them, whichever came last. And after a year, only one fee may be charged against the card’s value every month. The card issuer has to tell you about those fees in advance.
If you purchase a gift card in B.C. be advised that there is Gift Card Legislation in B.C. that does not allow for pre-paid purchase cards to have expiry dates or fees associated with them except in certain circumstances. For details about the exceptions visit Consumer Protection BC.
So before buying a gift card, consider the following:
Gift cards can be a great present if they meet the needs of the receiver and if everyone understands the terms or conditions related to the card.
- Will the person that the gift card is purchased for actually use it? Do they shop at that store? If you are not sure, consider giving cash instead.
- Does the card come with any restrictions? Are there any limitations to the types of products or services that can be purchased?
- Does the card have any fees associated with it that either you or the recipient have to pay, such as an activation fee, transaction fees, or inactivity fees if the cardholder does not use the card within a certain period of time?
- Can the gift card be returned if it is not going to be used?