Gift Cards Overview
Gift cards are a very popular method of gift-giving. They are available for retailers ranging from department stores to movie theatres, as well as in general-purpose forms that are branded with major credit card names. However, not all gift cards are created equal. Provided here is a guide to some of the conditions that may apply to gift cards.
Some gift cards expire after a certain period of time. Validity periods vary dramatically between gift cards, from six months to five years or more. Some gift cards never expire. Some states including California, New Hampshire and Washington have passed laws prohibiting expiration dates on gift cards. Cards in those states are valid forever.
Some companies do not have expiration dates on their gift cards, but charge monthly fees if the card is not redeemed within a certain period of time. Maintenance fees vary between cards, but are often in the $2 to $3 range per month. Maintenance fees generally take effect after six months or a year.
A gift card can become a much more expensive gift if a service fee is charged. Fees ranging from $3.95 to $11.95 are not uncommon. The fee is generally highest for phone orders, somewhat lower for internet orders and either low or nonexistent if the card is purchased in person. Some states including Washington and California have passed laws prohibiting service fees on gift cards.
Shipping and Handling
Shipping and handling fees can be surprisingly high on gift cards. Fees typically range from $4.95 to $8.95 for standard shipping. If priority or overnight shipping is requested, fees may be significantly higher.
Replacing a Lost or Stolen Card
Gift cards should be treated as cash. Some retailers and general-purpose card issuers will provide a replacement card for a hefty fee. However, many card issuers do not offer replacements. A few retailers offer free replacement cards with the receipt from the most recent purchase.
In the days of single-use gift certificates, obtaining cash was often a simple matter of making a low-cost purchase and receiving the difference in cash. Today, however, gift cards are capable of carrying a balance over multiple transactions. Consequently, it is much more difficult to get cash from a gift card.
Some general-purpose gift cards provide PIN numbers, allowing them to be used to withdraw cash at an ATM. However, transaction fees apply. Redeeming a general-purpose gift card for cash is sometimes possible. However, the $10 to $15 processing fee makes this option impractical in most cases.
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