Look a gift card in the fine print

To many consumers, the lone existent difference among assorted gift card game is which merchandiser issued it.

But all card game are not created equal, and you necessitate to pay close attending to the footing and conditions, which can change greatly from one card to another.

Gift card game have got go a large portion of the vacation shopping season, the perfect gift for the hard-to-please. As a result, they rank 2nd lone to clothes in what consumers anticipate to pass this twelvemonth and first on women's wishing listings in a study of more than than 1,000 grownups by the Consumer Reports National Research Center.

Such popularity pushed gross sales of gift card game to $80 billion last year, and the sum is expected to exceed $100 billion by 2008.

It's easy to understand why. They're readily available, so even the ultimate postponer who waits until Dec. Twenty-Four to get shopping should have got no job determination a suitable gift card at the eleventh hour.

So what's the problem?

For starters, some card game self-destruct via termination days of the month and a assortment of charges, including an upfront purchase fee of $2 to $10 and monthly administrative costs that gnaw the card's value.

The L. M. Montgomery County (Md.) Office of Consumer Protection, which have analyzed gift card tendencies over the past five years, studies that each of the 20 bank-issued cards it studied enforces a purchase/processing fee, deducts post-purchase fees, and have termination dates.

These cards, which transport the logotype of American Express, Discover, MasterCard or Visa, are appealing because they can be used at more than than one store, whereas those issued by individual retail merchants have got limited use.

But you pay for that privilege.

"Even a cursory expression at depository financial institution card game uncovers they are considerably more than composite than retail cards," said Evan Johnson, the writer of the Old Line State report.

"The relevant information on retail card game ordinarily suits on the dorsum of the cards, whereas depository financial institution card game are packaged with a fairly drawn-out understanding of footing and conditions," he said.

A "substantial" job with depository financial institution cards, in improver to the cost, happens when you seek to utilize them toward a purchase greater than the value on the card -- the so-called "split tender," Samuel Johnson said.

"In such as a transaction, the cardholder is supposed to have got previously ascertained the precise value on the depository financial institution card and inquire the check-out procedure clerk to divide the dealing into one for that amount on the depository financial institution card and another for the balance of the purchase with a different word form of payment," he wrote in the report.

With either type card, footing may be difficult to happen or lacking key details, whether purchased online or in person.

It can be especially tough when the regulations are printed on the dorsum of the card that is glued to a show card.

Disclosure is improving under pressure level from regulators and the public, especially with retail cards, and some concealed costs have got been dropped, Samuel Johnson says. But he didn't happen similar improvement with depository financial institution cards.

At least 30 states have got regulations for gift cards, but they change greatly from state to state. New Jersey's Gift Card Act of 2002 protects consumers to some degree, but there are loopholes that demand to be closed.

Among the law's provisions:

No gift card can run out for 24 calendar months after purchase.

After 24 months, a retail merchant may bear down a "dormancy fee," not exceeding $2 per month.

The quiescence fee cannot be imposed within 24 calendar months following the most recent activity with the card.

Any termination day of the month or quiescence fee must be disclosed at the clip of purchase "by legible written notice" on the card.

The Gift Card Act uses only to card game issued by retailers, not banks, however. A measure to change that (A-2258) sailed through the Assembly last spring, but have sat inactive in the Senate (S-1249).

While fees can cut down a card's value, consumers lose even more than than in the manner they utilize gift card game or, more correctly, how they are increasingly not being used, even as they turn in popularity.

According to research by TowerGroup, consumers lose nearly $8 billion a twelvemonth – about 10 percentage of entire gift card gross sales – owed to unredeemed value, termination or loss of cards. That is more than than dual the amount lost to debit entry and recognition card fraud.

The Consumer Reports study establish that the chief ground they weren't used is that receivers said they didn't have got clip to shop (58 percent) or couldn't happen anything to purchase (35 percent). Only a 3rd of the people who didn't utilize the card game said it was because they forgot about them, lost them or the card game had expired.

In addition, receivers often pass only portion of a card's value and allow the balance expire.

Whatever the reason, unexpended gift card game consequence in losings for consumers and gravy net income for merchants. According to Best Buy's 2006 yearly report, that came to $43 million.

Some enterprisers have got attempted to hard cash in on these fresh card game by creating a marketplace (for a fee) to buy, sell and trade them (at a discount, of course). But that looks a awful waste.

That's why you necessitate to read the mulct black and white carefully before you purchase one or if you acquire one.

Johnson listings five characteristics to look for: no fees, no termination dates, can be replaced if lost or stolen, can be used on the company's Web site, and have got a scratch-off PIN for security.

Yes, gift card game can work out your vacation gift-giving needs. But only if you play your card game right.

E-mail: demarrais@northjersey.com