Don't Put a Gift Card in That Christmas Stocking

Given the trouble many retailers are in, this is definitely not the season for gift cards. See the previous post When is a Gift Card Not a Gift Card? Echoing this seasonal sentiment is an FTC Consumer Alert: Buying, Giving and Using Gift Cards.

Shopping for gifts can be a real dilemma. Just what do you get your finicky Aunt Mary, your co-worker, or your child’s babysitter? Gift cards may be the answer: one size fits all, and the recipients can get exactly what they want from a retailer or restaurant.But before you buy a stack of gift cards, the Federal Trade Commission (FTC), the nation’s consumer protection agency, wants you to know that there are two types:

• retail gift cards, which are sold by retailers and restaurants, and can be used only with those merchants. Retail gift cards may have expiration dates or a fee for inactivity that sometimes is called a “dormancy fee.”
• bank gift cards, which carry the logo of a payment card network like VISA or MasterCard, and can be used at any location accepting cards from that network. There are more likely to be fees for activation, maintenance, or transactions on bank gift cards than on retail gift cards.

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