Gift cards...the gift that keeps on giving...and taking

MONTGOMERY COUNTY, Texas - For the eighth consecutive year, the National Retail Federation reports that gift cards will be the most requested gift this holiday season. Unfortunately this annual industry worth hundreds of billions of dollars, is a prime target for theft, making the practice of giving gift cards the gift that keeps on giving...and taking.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 ruled that gift cards cannot expire until five years after they are issued...the date they are loaded with money. This makes them extremely attractive for people to redeem the value on an as-needed basis, without fear of expiration.

Although the advisory company CEB (Corporate Executive Board) estimates that over a billion dollars in gift cards go unredeemed annually, over $100 billion is spent throughout the year. Gift cards are not exactly the most imaginative gift in the world, but they are easy to give and even easier re-gift. Unfortunately, when the card is re-gifted, it may have been previously used, leaving the recipient with less than the expected amount, and sometimes with no balance at all. The card giver may not have remembered using it, or received it as a gift.

Gift card fraud occurs when unscrupulous people turn around and sell gift cards on the secondary market after they’ve used up the balance. Online gift card resale sites and auctions handle these cards in good faith, and the opportunity to buy a gift card at a reduced rate is tempting, but buyers beware. You can not only be out the money, but create a tremendous amount of embarrassment for the card recipient when they attempt to redeem it. As the saying goes, “It it sounds too good to be true, it probably is.”

Safeguards when giving gift cards…

For the gift card giver:


Verify the amount on the card before giving it as a gift. After purchasing a gift card, verify the amount has in fact, been put on the card by making a simple phone call before you give it as a present. Although retailers will tell you it doesn’t happen, amounts at points of sale, aren’t always loaded on the gift cards, but later after to customer leaves, to the clerks credit cards. Take the card to the Customer Service Department and have it doublechecked before leaving the store.

Only buy from trusted sources. Gift card resale markets offer gift cards for less than the face value of the card, but not all of them guarantee the stated value. If the original purchaser still has the gift card number and PIN, it can still be used online, even after selling it. Or, if the retailer discovers the gift card was purchased using a stolen credit card, it can cancel the gift card. Buy directly from the retailer issuing the gift card.

Look for signs of tampering. Always buy a gift card in a protective, plastic casing. If a card is not protected, make sure the PIN hasn't been scratched off. Digital gift cards are also becoming increasingly popular and don't have the potential for physical tampering.

For the gift card recipient:


Register your gift card. Some retailers allow gift card holders to register their gift cards to protect the balance in case the card is ever lost or stolen. Not all merchants have this option, but if so, do so.

Treat gift cards like cash. Use the card sooner rather than later. The recipient will be able to redeem the value before fraud or loss, or worse, before the merchant goes out of business.

Always call first before redeeming. Call the retailer or restaurant beforehand, and verify that the card has the appropriate balance. Save yourself the embarrassment and the extensive time with customer service at the location of redemption.