If you are thinking of buying a general-purpose gift card that can be used at most stores, there are a few things you should know.
According to the Consumer Federation of America the cards issued by Visa, MasterCard and American Express may have a few underlying rules.
While most store cards have no fees or expiration dates, the general purpose cards usually cost $4 to $7 to purchase and are sometimes subject to monthly fees as high as $4.95 as early as six months after purchase, said Stephen Brobeck, the federation’s executive director.
Pay attention to the card’s expiration date and use it within six months if possible. About $5 billion or an estimated 10 percent of the value of gift cards’ is never used, and more is lost through monthly fees, Brobeck said.
U. S. consumers will spend an estimated $50 billion on gift cards this year, with about $4 billion of that on the general purchase cards. Yet, a recent nationwide survey of 1,004 adults found that only one-third knew about fees charged to purchase the cards; 54 percent knew about monthly fees.
Last month American Express announced it is ending monthly gift card fees.
While it’s still “buyer beware” when it comes to gift cards, more consumer protection is coming next year.
A new federal law that goes into effect in August 2010 prohibits fees being charged on gift cards if they have been used in the previous 12 months. The law also prohibits gift cards from expiring for at least five years.
The Consumer Federation of America and the National Association of Consumer Agency Administrators, which represents government agencies that provide consumer services, have produced a new consumer brochure on gift cards. It’s available at www.consumerfed.org by clicking on What’s New at CFA and is found under Education Resources. If problems with gift cards arise, first contact the store or financial institution that issued the card. If unsuccessful, contact the Federal Trade Commission at (877) 382-4357.
http://www.buffalonews.com/185/story/847478.html
Tags: consumer, fees, gift cards
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