Gift cards are big business, and no wonder – people love to give them and to get them. In December 2018, more than half of surveyed people said they would be giving gift cards, and 61% said they would ask for them. Motley Fool, “Thirty-five Things You Should Know About Gift Cards.”
Watch out for scammers
Gift cards are even popular with scammers. Classic phone scams such as calls pretending to be from a loved one who needs bail, a utility about to cut off your power, or even the IRS, now end with instructions to buy gift cards instead of wiring money. The victim then gives the scammer the card number over the phone. The result is an instant payment that’s very hard to trace.
In 2018, the Federal Trade Commission reported that the number of these scams has jumped 270 percent since 2015. If this happens to you, the FTC advises contacting the issuer of the card immediately; you may be able to get your money back if you act immediately. They list contact info for some of the most popular cards, including Amazon, iTunes, Google Play, MoneyPac, and Steam, to help you report the fraud.
Gift card consumer protections
In the past, gift cards could have downsides such as fast expiration dates or monthly fees that might eventually exceed their balance. Both California and the federal government have put some protections into place curbing these problems.
The federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “Credit CARD Act”) provides that gift cards cannot expire for at least 5 years, and service or dormancy fees cannot be imposed unless the card has been unused for at least 12 months. Expiration dates and monthly fees must be listed on the card.
California’s law is even stronger – most gift cards sold here cannot expire or charge a service fee at all. California also requires merchants to provide cash back for a card with a balance less than $10. Dormancy fees can only be applied if the balance is $5 or less, and the card has been inactive for at least 24 months.
California’s law only applies to merchant cards – cards for particular stores, restaurants, or sellers. It does not apply if the card can be used anywhere (such as an American Express, MasterCard, or Visa gift card). The less-strict federal rules do apply to those cards, however.
Consider going digital
Carrying your gift cards around is like carrying cash – if they are lost or stolen, the balance is usually just gone. But leaving them at home means they may not be used.
One way to make your gift cards safer and more convenient is to use an app such as Gyft or Stocard to upload them. You can then use them without having to carry them with you.
In addition, some cards can be registered with the merchant or bank that issued them, for protection against loss or theft.
Some online retailers, such as Amazon, will let you upload the amount on the card as credit toward future purchases.
In fact, if you want to avoid the hassle of actually handing someone a gift, you can gift them credit on sites like iTunes or Steam through your own account, or buy “digital delivery” cards for many retailers through Amazon. Then just send a and you’re done.
by Public Services Librarian Kate Fitz
Motley Fool, “Thirty-five Things You Should Know About Gift Cards.” Selena Maranjian, December 12, 2018.