Are Your Gift Cards Losing Value?

By Michele Blandino

Many of us have either received or given a gift card as a gift. In fact, chances are you have at least one gift card in your wallet right now. For the uninitiated, gift cards are the modern version of the gift certificate: credit card sized pieces of plastic that allow you to purchase goods up to a stated dollar amount in a particular store.

Gift cards are a terrific option when we need a last minute gift or we are simply stuck for a gift idea for someone. In fact, one study indicates that more than 80% of teenaged shoppers select gift cards more than any other item when it comes time to pick a gift for a friend. They're easy to purchase, and fit easily inside a greeting card.

And, while it's true that there isn't much that can beat the convenience of a gift card, you should be aware of some hidden caveats.

Buyer Beware

First, be aware that some gift cards bear expiration dates and will be invalid after the stated date has passed. While some stores will activate the card after the expiration date, in other cases, you will be forced to forfeit any balance remaining on the card. If you're not sure about the cards you are currently carrying, check with the store that issued them.

In other instances, merchants will deduct a fee - sometimes monthly, sometimes quarterly - from cards that are not used. This so-called inactivity fee will reduce the card's available balance. Again, the rules and conditions are available from the merchant that issued the card.

Another thing to be aware of when using a gift card is that in most cases, any unused portion cannot be paid to the holder as cash; leftover balances will remain on the card and can be spent at a later date.

How to Protect Your Purchase

Fortunately, many states have passed or are in the process of passing legislation to prevent perchants from affixing expiration dates to the gift cards they sell. And, while this comes as good news to those of us who have a habit of forgetting about our gift cards, there are still some steps you should take to protect yourself (or gift recipient) when purchasing a gift card.

First, when purchasing a gift card, be sure to keep the receipt; a receipt is the only way to trace your purchase should you lose the card. And, considering the card's value is stored on a magnetic strip, there is always the chance the strip will malfunction; having a receipt will enable you to replace the card at its full value. Similarly, if you don't use the card's entire value, be sure to ask for a receipt stating the card's remaining balance. This will help you keep track of any balance you have left to spend. Finally,  if you find yourself with several cards from the same retailer, ask about having all the balances combined onto one card. This will make it easier for you to keep track of your balance and will reduce the likelihood of you losing one or more cards.