Gather Little by Little

This is a guest post by Linda Bustos who is an editor for Creditor Web, where you can learn about credit cards or chat in the credit forum.

A recent survey by BIGResearch reports that 69% of consumers plan to give at least one gift card this year, and over 50% of consumers hope to find a gift card in their stocking, under their tree or in their email inbox. Gift cards are convenient last – minute fixes for holiday shopping dilemmas and give recipients more freedom to choose what they really want or need. Americans will spend an estimated $26 Billion on gift cards this year, but as with anything, consumers need to know how to shop for gift cards wisely.

When You Buy a Gift Card

1. Avoid eBay

The gift cards available in the supermarket or from retail stores (brick-and-mortar or online) are always the real thing. But you can get taken on online auction sites (like eBay) – a portion of the card may be already used, or the card could be counterfeit.

2. Read the Fine Print

Just like when applying for a credit card, you should read the gift card’s policy. Bank-issued gift cards (for example, Visa’s “My Treat” pre-paid credit cards) are more likely to carry expiration dates. Other fees bank-issued gift cards employ include activation, inactivity, transaction and maintenance fees. Some have the nerve to charge for checking the balance!

The majority of retailers (92%) have no restrictions or surprises – but you want to make sure to save your giftee disappointment and yourself embarrassment. As an additional safeguard, hang onto your receipt – just in case there’s any problem with the card. The best gift card / gift certificate programs also have a registry that if a card is lost, a new card can be issued with proof of purchase.

3. Choose a Suitable Denomination

Retailers love gift cards because people will either spend more than the card’s value or less than what the giver paid – the retailer wins in both situations. What your gift card recipient ultimately spends is unpredictable, but you don’t want to force them to spend additional money because the gift card doesn’t cover the price of most items or services from the gift card issuer. For example, giving a $25 gift card to a spa where even a basic massage is $50 treatment means your gift was more like a 50% off coupon.

4. Opt for Gift Cards, Rather Than Gift Certificates

Gift cards are becoming more common than gift certificates. Not only is the plastic more endurable, but the magnetic stripe allows the card to hold a balance, whereas with traditional paper certificates, the merchant has to issue a new certificate every time a portion of the balance is redeemed. Some retailers even let you customize your gift cards with a photo – which adds a personal touch.

5. Remind Your Recipient When Sending E-Gift Cards

Some online retailers let you choose physical or virtual gift cards. (This is really convenient when you need a gift at 11:30 on Christmas Eve for a relative overseas!) Electronic gift cards can be emailed instantly and redeemed with a special coupon code. The problem is you run a risk of the email not making it to your recipient. It’s a good idea to give the recipient a call shortly after sending it to make sure they indeed received it and it was not flagged as spam or inadvertently deleted.

When You Receive a Gift Card

Spend it Soon

An estimated $8 Billion worth of gift cards from last Christmas still haven’t been redeemed. Sure, it’s easy to misplace gift cards or even forget about them. Using them right away reduces this risk, and you may get more mileage out of your cards during Boxing Week sales. If there’s nothing you want from the store immediately, keep the card in your wallet with your ID, debit and credit cards. This is another advantage of gift cards over gift certificates – they fit nicely in your
wallet and are not so easy to misplace.