Editorial - Buying a gift card for Christmas? Read this advice

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Gift cards can make a great Christmas gift and they are becoming more and more popular.

Surveys have shown that between 40 and 50 percent of consumers buy gift certificates or gift cards for the holidays, accounting for about $30 billion in spending.

Shoppers should be savvy before they buy, however. And local businesses that issue gift certificates should make sure they’re obeying the law and not ripping consumers off – such as placing expiration dates on the certificates.

The Minnesota Attorney General’s Office says consumers should know the following information before purchasing a gift certificate:

• Use caution. You should only purchase gift cards and gift certificates from reputable merchants and retailers. Some people purchase gift cards or certificates only to later see the retailer go out of business or file bankruptcy. If you pay money up front for a gift card or certificate from a retailer that closes its doors, you will likely have lost your money. As a result, you should only purchase gift cards and certificates from reputable merchants that you are sure will not go out of business.

• Fees. Make sure you know what fees, if any, apply to the gift card or certificate. Under state law, most issuers of gift cards and certificates may not impose fees, but some issuers may charge purchase fees, monthly maintenance fees, inactivity fees, etc. depending on the circumstances. Federal law prohibits such fees unless one of the three exceptions applies – there has been no activity on the card in the last 12 months; any fees are clearly disclosed on the gift card; and not more than one fee is charged each month.

• Expiration dates. Most gift cards may not contain expiration dates under state law. In addition, federal law generally prohibits gift cards or gift certificates that contain an expiration date sooner than five years after the date on which the card was issued. Make sure you know whether there is an expiration date for the card or certificate. (One notable exception to the federal laws protecting gift cards and certificates is that they do not apply to cards or certificates issued in paper form only.)

• Where you can use the card. A gift card or gift certificate issued by a particular retailer often can only be used at the store at which it was purchased (or an affiliated store). However, some gift cards, like those attached to major credit card companies and national banks, can be used at many places nationwide.

• Lost or stolen cards. You are usually out of luck if your gift card or gift certificate is lost or stolen. Know the rules for how the company deals with a lost or stolen card or certificate. Will the company issue you a replacement card or certificate? If an unauthorized person uses the card or certificate, will you be compensated?

• Pass all information to the recipient. If information about fees, expiration dates, and other matters appears on a separate document, make sure the information is passed to the recipient of the gift card. Giving the recipient this information will ensure that they make the most of your gift.

So before plunking down part of your holiday shopping money on a gift certificate, treat it like other thoughtful Christmas gifts. Research it a little. Make sure the recipient won’t be stuck paying any fees or discover that the certificate will soon expire.

Tags: opinion, editorials