Guide to gift card giving

With the gift-giving time upon us, you may have started looking at gift cards for the last few people on your list. If you are, the Better Business Bureau recommends doing your research beforehand. — By The Better Business Bureau

“Consumers need to be on the lookout for gift cards that appear to be ‘open’ or out of their original package, and cards that state an expiration date that is coming up or that has passed,’’ said Paula Fleming, vice president of the Better Business Bureau of Eastern Massachusetts, Maine, Rhode Island, and Vermont. “Shoppers should be wary of online auction sites that promise ‘full value guaranteed’ gift cards. It’s sites like these that are prone to selling old, valueless cards that leave the gift giver and receiver distraught.’’

BBB recommends the following tips for both givers and receivers of gift cards.

Check it out

Make sure you are buying from a known and trusted source. You can check out a business at the BBB website. Avoid online auction sites, because the cards sold there may be counterfeit or may have been obtained fraudulently.

Inspect the card before buying it

Verify that no protective stickers have been removed, and that the codes on the back of the card haven’t been scratched off to reveal a PIN number. Report any damaged cards to the store selling the cards.

Read the fine print before buying

Consumers need to know several things before making a purchase. 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?

Know the rules

New federal rules that took effect in August 2010 are designed to protect consumers, and will restrict fees and affect gift card expiration dates.

These new rules apply to two types of cards: Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express, Visa, or Mastercard and can be used wherever the brand is accepted.

Provide the receiver with back up

Give the recipient the original receipt in case the card is later lost or stolen. Also, 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. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. Call the business or its competitor to find out if they are redeeming the cards, or if they will do so at a later date.

Treat the gift card like cash

For receivers, it’s important to report lost or stolen cards to the issuer immediately. Some issuers will not replace cards that are lost or stolen, while other issuers will, for a fee.

Make sure to use gift cards as soon as possible, because it’s not unusual to lose or forget about them.