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Can’t
remember Grandma Sarah’s slipper size for her birthday?
What kind of music sister Laura’s twins like? Whether
Dad still wears Old Spice or will he try some new
fragrance? Gift buying can be confusing and aggravating.
In recent years, the quick answer to all of the above
questions has been: gift cards.
Those plastic
credit card-sized gifts, sometimes colorfully wrapped or
playing music or packaged with another small gift, can
solve a multitude of gift-giving problems, but they are
not always perfect.
The gift card
industry has been growing rapidly with research groups
estimating a record $35 billion in holiday gift cards
sales this year, up from $25 billion in 2006 and an
estimated total of $97 billion in 2007.
It is easy to
plunk down your cash and walk away with the “perfect
gift,” but there are hidden aspects to these cards. Be
wary of buying a card that the recipient may not use. Some
large companies have millions of dollars’ worth of
unredeemed gift cards, which to them is like interest-free
cash. Don’t spend money on a card that will only end up
“giving a gift” to the company issuing the cards.
Always buy
gift cards from reputable companies or from reputable
online sites. Some online sites offer “discounted”
cards – a card from a popular chain, but discounted as
much as 50 percent. Do not use those sites! Thieves are
known to steal credit card numbers, then and then use them
to purchase gift cards and ultimately sell those cards
online.
Some reputable
sites are requiring a seller of a gift card on its site to
hold the card at least 10 days before offering it for
sale, enough time for the owner of the stolen credit card
to close down the sale. Other sites may limit the gift
card dollar amount allowed for sale per week to provide
widespread fraud.
There are some
legitimate discounted sales of gift cards, such as from
newly married couples who receive gift cards from a
furniture store when they would prefer ordering from a
sporting goods store. The couple is willing to lose a bit
of the face value to get the cash.
Another type
being offered is a Healthcare Visa Gift Card in
denominations from $25 to $5,000. This card can be used
for any merchant who accepts Visa credit cards and
provides wellness or healthcare services (gym memberships
to hearing aids to prescription drugs) or for co-pays at
doctors’ offices.
Parents may find it a helpful gift for the college
student. The young person would have ready access to the
funds for a dental or vision appointment or to purchase
needed prescription medications.
Imagine giving
Uncle Stan some financial help with his gallbladder
operation or Grandpa Leonard some new false teeth.
Gift cards
issued by banks are likely to be even more popular this
year because they can be used in more places.
When
purchasing any type of gift card, consider potential “added
fees.” Some cards have activation fees, shipping and
handling charges if ordering online, maintenance fees (for
cards not used within a specific number of months) and
then there is the “expiration date.” You don’t want
your mother to hold her $100 gift card for a year waiting
for just the right sale only to find that all the money is
lost because the card has expired.
And what
happens if the card is lost or stolen? Although owners of
gift cards should treat them as cash, if lost or stolen,
they may be replaced. While Dan Donovan, spokesman for
Giant Eagle, Inc., emphasizes that his company is not
responsible for lost or stolen gift cards of the 70 types
they sell, he suggests that customers retain their
activation receipt obtained at time of purchase. “The
activation receipt will include the gift card number that
is needed to investigate lost or stolen card occurrences,”
says Donovan. “In limited circumstances, some retailers
will deactivate the lost or stolen gift card and issue a
new gift card to the customer. Customers should contact
the card issuer directly to attempt to replace a lost or
stolen gift card.”
But what if
you purchase a gift card from a church or other group? “Giant
Eagle maintains an incredibly robust bulk gift card
program, whereby we sell Giant Eagle gift cards to both
profit and non-profit organizations,” says Donovan. The
organizations re-sell the cards at face value but retain
some of the proceeds of the sale for fundraising purposes.
In that case,
it is wise for the purchaser to jot down the card number
when the card is purchased, and any other pertinent
information on the card. It is most important to contact
the issuing company immediately if it is believed that the
card is lost or stolen and prove you are the owner. There
may be a replacement fee.
One
interesting example of a stolen card has to do with a
Giant Eagle gift card. It was lost at a local Giant Eagle
and another customer found it and decided to use it. By
the time the owner of the card reported it to the Giant
Eagle Loss Prevention Department, the card had been
emptied at yet another Giant Eagle. However, Loss
Prevention employees could determine at which store and on
what date and time it was used because the card owner
could provide the card number. There was even video of the
thief using the card to buy groceries. The culprit was
caught by the police and eventually paid back the amount
on the card plus the amount the owner had to spend in
obtaining a new driver’s license and other items in the
wallet. Sometimes crime doesn’t pay.
Gift cards are
not a prime target for shoplifters because they are not
activated until they are purchased. Retailers like them
also because they take up very little space but can sell
for big money.
Throughout the
country, supermarkets and drugstores feature “gift card
malls” with special stands displaying gift cards from
non-competing businesses.
Donovan says
that gift cards on sale at Giant Eagle or Get/Go locations
range from $15 to a new $500 Home Depot gift card. They
are also adding some new ones for the Pittsburgh Steelers,
Children’s Museum of Pittsburgh, and Southwest Airlines.
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