Fraud and fees can leave you paying more for a gift card than you need to
Some holiday traditions never change. This year’s most popular gifts haven’t changed and neither has the fact that money will be wasted on them.
For the 13th consecutive year, gift cards are the most frequently requested item on a holiday wish list, according to the National Retail Federation.  Three-fifths (59%) of Americans are asking for them this year – the largest response.
Here are some tips to make sure you get the most out of gift cards while shopping for them…
Beware of gift card fees
Some fees can be charged against the balance of the gift card. Generally, these fees are only applied to cards issued by banks. If you want to avoid paying extra buy directly from a retailer.
- Activation fee
- Inactivity fees
- Reload fees
- Replacement fee
- Shipping fee
Use them or lose them
Please don’t throw them in the back of the kitchen or office desk drawer to collect dust. Research shows that Americans leave $45 billion worth of gift card balances unused. If the card is generic like a visa card an expiration date must be printed on the card. Those cards can expire over time, so don’t waste a friend or family member’s money.
Inspect the card before buying it
Hundreds of consumers complain each year to the Better Business Bureau about getting ripped off by gift card scams. It can be as simple as someone jotting down the number on the gift card and waiting for an innocent shopper to activate the card.
“Consumers need to be on the lookout for gift cards that appear to be ‘open’ or out of their original package,” says Christine Sauers from BBB Delaware.
The BBB says you should:
- Verify that no protective stickers have been removed.
- Check the codes on the back of the card to make sure they haven’t been scratched off to reveal a PIN number.
- Report any damaged cards to the store selling them.
Keep the receipt
If something is wrong with the card and you don’t spot it until after you’ve left the store, the receipt is proof enough to fix the problem. Ditto if the card is lost or stolen. So when you give your gift card, also give the receipt.
Avoid bad businesses
If you buy a gift card from a company that goes bankrupt, there’s usually no way to recover that money. So do a little research before buying a card.
The BBB puts it this way: “Before you buy retail gift cards, consider the financial condition of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless.”
Don’t buy into an offer that’s too good to be true
Don’t believe steep discounts and free offers that spam your email inbox. At least that’s what the FBI says: “Remember, if it looks too good to be true, it probably is.” 
Most of those offers that claim to be selling gift cards for 85 percent off are fraudulent. The FBI suggests searching the company or website in the BBB’s database to see if it’s legitimate. Just type the company name into the search bar at the top and see if they’re registered. You can also read complaints consumers filed with the different companies.
Buy cards from retailers, not banks
Most banks charge you to buy a gift card. Fairly typical is U.S. Bank, which adds a $3.95 “purchase fee” if you buy it at one of their branches – and $6.95 if you buy online.
There’s also this weird fee apparently designed to make the card self-destruct: “After the first 12 calendar months following the issue date of the card, a $2.50 fee will be charged to your Gift Card each month until the card expires.”
But nearly all retailers rarely charge fees, whether it’s Victoria’s Secret or Men’s Wearhouse. Plus, they usually don’t have expiration dates, because that discourages shoppers from coming back. Guess banks don’t care.
Check the little print
The BBB puts it this way: “Read the fine print before buying. Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?”
That US Bank gift card we mentioned? It buries its onerous fees on this terms and conditions page that’s two clicks away from the offer page. Of course it does.
Be careful buying online
There are a few credible discount gift card websites that can save you a pretty penny, but you’re also at risk of getting scammed when you look for discounts. The BBB lists credible gift card sites in their database.
This article by Lulu Ramadan was originally published on Debt.com.
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Published by Debt.com, LLC