As a pilot, my husband, Bob loves this warning sign. But it’s not too funny if your car has ever been hit by a crop dusting airplane! This holiday season has a HUGE warning sign attached to it regarding what consumers chose as their #1 gift option for the last two years–GIFT CARDS!

Warning #1 –  store closings  After you’ve purchased the gift card, a store may shut its doors. You really have to be cautious in buying gift cards because when a store files for bankruptcy or closes, it’s up to the bankruptcy courts & too often, they don’t have to honor the existing gift cards. Some closed stores in recent years walked away from 20 million dollars in unhonored cards!

Warning # 2 – fees on gift cards.   In 2010, the  Credit Card Accountability Responsibility and Disclosure Act (CARD) to protect consumers and retailers in the area of gift cards. This protects prepaid branded cards (AMEX, Visa, MasterCard) from having an expiration date less than five years from purchase. Furthermore, dormancy, inactivity and service fees cannot be charged until after 12 months. BEWARE:  some of these cards can still charge fees every time the balance is checked, the card is used, customer service is called, or if you need a replacement card. Read the fine print before you buy.

Warning #3 – stolen numbers. Before you buy a card, especially one that is hanging on a rack among the public (as in a grocery store), inspect the card to make sure stickers are not removed and PIN numbers aren’t visible. Or ask for a card that is behind the counter or hasn’t been stocked to the rack yet. Be sure to also get a purchase activation receipt when you give it to others. Thieves are writing down numbers and pins and then periodically checking online to see when the cards go active, then they steal the balance on the card.

Gift cards are still a popular and practical way to go in today’s economy. In fact,  some families may appreciate a card to a major discount retailer because it will allow them to buy groceries and clothing.

A Happy Shopper is a Cautious Shopper!

Ellie Kay

America’s Family Financial Expert (R)

©2016-2020 Ellie Kay


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