By Sharon Omahen

University of Georgia

Gift cards have become popular options for the holiday season and
other gift-giving times. But a University of Georgia financial
expert warns gift card givers to read the fine print before
buying and giving gift cards.

“Different cards come with different terms and conditions related
to fees, expiration dates, where you can use the cards and what
happens if cards are lost or stolen,” said Michael Rupured, a UGA
Cooperative Extension financial specialist. “Gift cards are
definitely not all created equally. There can be some big
differences from one card to another.”

Less than your money’s worth

Some gift cards actually cost more money than what they’re worth,
he said. For example, a $50 gift card can cost $55.

“So you’ve lost $5 from the purchase fee right off the bat with
this type of gift card,” he said. “Typically, these are the gift
cards that can be used at multiple locations.”

Gift cards purchased directly from a retailer are usually offered
at face value, he said. But they may have different charges
associated with them.

The card recipient can be charged for not using their gift card,
too.

Fees, fees, fees

“Some companies deduct a nonusage fee starting about six months
after the date the gift card was purchased,” Rupured said. “This
is a concern, because many people set gift cards aside and forget
about them. And this fee will continue to be subtracted from the
card until its value is depleted.”

Per-use transaction fees are another possible drawback to using
gift cards, he said. This fee is deducted from the gift card if
the entire amount isn’t used in one transaction.

Rupured said the face value of some gift cards can even be
reduced by a fee that’s charged when you call to check the card’s
balance.

“All of these fees and terms should be disclosed, perhaps on the
card itself,” he said. “But more often, the fees are explained in
a separate document, on a Web site or from a toll-free number.”

Just like cash in many ways

Gift cards work just like cash. When you make a transaction, that
amount is deducted from the amount on the card.

And, just like cash, if you lose a gift card, the person who
finds it can pick it up and use it.

For safety sake, Rupured says, write the gift card’s unique
number on your receipt. Then attach the receipt to the gift card.

“They already know how much you’ve paid, and now they’ll have the
information they need to replace it if it’s lost,” he said. “And
they have the detailed information on any possible fees, too.”

As long as you pay attention to the terms, he said, gift cards
can be useful.

“A lot of retailers don’t charge any fees for using their gift
cards,” he said. “And if you have family or friends in different
cities, you can buy a gift card from a major retailer. Just check
with them to make sure they have the same retailer near by.”

Gift card tips

To make sure the $25 you spend on a gift card is actually a $25
gift, then, (1) be sure you understand the terms, (2) keep the
receipt and write down the card number in case it’s lost or
stolen, and (3) give the receipt with the gift card so the
recipient will know how to use it to get its full value.

“If you’re still leery of gift cards, it might be a smart idea to
just give a personal check,” Rupured said. “There are no fees
associated with it, and recipients can get the cash and use it
anyway they like.”