Gift Cards: the perfect gift?

In recent years gift cards have gained tremendous popularity. We take a look at the pros and cons.

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Gift Cards

Gift Cards have an unjust reputation of being impersonal, but why? If you’re like most of us, gift cards are the perfect gift. Who doesn’t like getting a free gift card? Utilizing a gift card at your favorite retailer sure beats that annual fruitcake from Aunt Hady. And the guilt free spending that comes with it can be quite fun.

These cards can be a practical way to give to family or friends. With a little bit of foresight, you can find a gift card that matches the interests of your recipient. Prepaid gift cards can be the ideal gift for the not-easy-to-shop-for individual or “the person who has everything.” You don’t have to worry about getting the wrong size or color, providing the recipient with the freedom to make those personal choices.

Like most things these days, there are pros and cons you should take a close look at before purchasing prepaid gift cards. Credit card type gift cards, such as Visa or MasterCard, appear appealing because they can be used at so many locations. But, they do come with some drawbacks. Activation fees can prove quite costly, only to be followed by monthly charges that are often based on dormancy and maintenance. Make sure to read the terms and conditions—which can be quite extensive—when selecting these types of gift cards. It is not uncommon for the following gift cards to charge high fees with eventual expiration dates:

  • American Express Gift Cards
  • Visa Gift Cards
  • MasterCard Gift Cards
  • Discovery Gift Cards
  • Shopping Mall Gift Cards

Recent legislation has been passed by some states to prevent these unjust fees and expenses. But many of the financial institutions have found loopholes. By providing full disclosure, they are legally allowed to continue with the charges.

The best way to avoid these excessive fees is to purchase gift cards directly from the major retailers or restaurants. The drawback, of course, is that you can only utilize the card at that specified retailer. This isn’t such a big deal if you give some thought when selecting an appropriate gift card, insuring it’s in the interest of your recipient. Below are just a few of the many retailers that offer gift cards with no fees or expiration:

  • Target Gift Cards
  • Walmart Gift Cards
  • Best Buy Gift Cards
  • Starbucks Gift Cards
  • Hallmark Gift Cards

Most commonly you can purchase gift cards at the retail store you choose or more conveniently, at the their web site. It is not at all unusual to see gift cards from The Home Depot, Sears, and many other retailers available on EBay. These can be purchased at a small discount, but aren’t always worth the trouble. Some may be stolen or fraudulent and don’t offer the peace of mind that comes with purchasing directly from the retailer.

If you’ve thought about utilizing EBay to sell an old gift card you’ve had lying around, you may want to try a gift card exchange. This will allow you to trade gift cards at equal value
rather than selling at a discount.

There are now many websites that specialize in gift card exchange, enabling you to swap gift cards online with other users. This may be worthwhile if you have absolutely no way or intention of using the gift card.

Proceed with caution when seeing offers for free gift cards. Free isn’t always free, and almost always requires something in return. Whether they require you to fill out surveys, questionnaires, or partake in multiple signups, make sure it’s a trusted source. Your promised free gift card will seldom make it to your door.

There are a few things to consider when selecting a personalized gift card. You’ll want to check the gift card’s specific policy. Ask about the fees that will be associated with the prepaid gift card. Will there be any activation fees? Can the recipient expect maintenance or dormancy fees? Does the card expire? Can the card be replaced if it’s lost or stolen? Also, consider the recipient when selecting an appropriate card. Will he or she use the card? Does the recipient enjoy shopping? If not, a gift card to an online retailer is often appropriate. Is the gift card a retailer the recipient has an interest in? Is the retailer accessible to the recipient? If you follow these simple guidelines you’ll be sure to give the perfect gift—a gift card.