Trade Commission Offers Gift Card Tips

By Navy Lt. Jennifer Cragg
Special to American Forces Press Service

Nov. 24, 2009 - Because distance often separates extended and even immediate families in military life, gift cards are a popular choice for holiday gift-giving. After all, one size fits all, and the recipients can get exactly what they want from a retailer or restaurant. But the Federal Trade Commission advises servicemembers and their families, as well as Defense Department civilians and contractors to think before they buy holiday gift cards this season, and buy from sources they know and trust.

"Avoid buying gift cards from online auction sites, because the cards may be counterfeit or may have been obtained fraudulently," said Carol A. Kando-Pineda, counsel for the commission's consumer and business education commission. So before you shell out your hard-earned money and buy a stack of gift cards, you should know a few things first.

It's true that shopping for gifts can be a real dilemma. Just what do you get your finicky Aunt Mary, your co-worker, or your child's babysitter? Though a gift card can be the answer, Kando-Pineda said, be sure to know what you're getting.

"Read the fine print before you buy," she said. "If you don't like the terms and conditions, buy elsewhere. Ask about expiration dates and fees when you're buying a card."

This type of information will always appear on the card itself, on the accompanying sleeve or envelope, or on the issuer's Web site. "If you don't see it, ask," Kando-Pineda cautioned. "If the information is separate from the gift card, give it to the recipient with the card to help protect the value of the card."

And buyers may not be aware, she added, that merchants often tack fees on to the gift cards -- for activation, maintenance or transactions, for example -- that may be deducted from the card's value at the recipient's end.

"It might be embarrassing to give someone a $50 gift card and find out later that fees gobbled up most of the amount," Kando-Pineda said.

Another note of caution to buyers of gift cards is what to do if the company you purchased the card from goes out of business.

"Well first, before you buy, you may want to consider the financial condition of the business and whether it has filed for bankruptcy," Kando-Pineda advised. "But if you do buy a card from a company that goes out of business or ultimately files for bankruptcy, it's as you might expect: the recipient may end up with a card that's worth less than the face value."

She added that before you decided to buy that gift card for Aunt Mary, you should consider how easy it will be for her to redeem that card. "Let's say the business closes stores near where the recipient lives or works," she said. "They may not be able to get to another location to redeem their card."

Kando-Pineda also recommends that recipients of gift cards shouldn't wait to use them. "Use your card as soon as you can," she said. "It's not unusual to misplace gift cards or forget you have them. Using them early will help you get the full value."

She noted that if a card does expire, the recipient should contact the issuer. "They may still honor the card," she said, "although they may charge a fee to do that."

Anyone who has a problem with use of a gift card should contact the company that issued it as soon as possible, Kando-Pineda said. If you can't resolve the problem at that level, she added, file a complaint with the appropriate authorities. If that doesn't fix the problem, she said, contact the Federal Trade Commission through its Web site or by calling 1-877-FTC-HELP (1-877-382-4357) toll-free. Complaints also may be filed with your state's attorney general.

(Navy Lt. Jennifer Cragg serves in the Defense Media Activity's emerging media directorate.)