Gift cards falling through gap
By Sandra Block
USA Today
For some folks, engaging in hand-to-hand combat over a discounted flat-panel TV is a holiday tradition. Others would rather walk barefoot over hot coals than go anywhere near a mall between Thanksgiving and Christmas.
If you fall into the second category, you may be a fan of gift cards. Gift cards are easy to buy, don't need to be wrapped, and always fit. Americans spent more than $18 billion on gift cards last year, and nobody got hurt. The National Retail Federation estimates that consumers will spend nearly $25 billion on gift cards this holiday season.
But some cards expire in as little as six months. Others come with inactivity fees that reduce the value of the card if it's not used within a specific period.
And while most Americans say they like receiving gift cards, a lot of those cards are gathering dust. About 19 percent of Americans surveyed by Consumer Reports said they still haven't used gift cards they received during last year's holiday season. TowerGroup, a consulting firm, estimates that consumers lose nearly $8 billion a year because of unredeemed, lost or expired gift cards. Here's how to get the most from the gift cards you give:
Many bank-issued gift cards charge maintenance fees, generally ranging from $2 to $4.95 a month. Most of those fees don't kick in for six to 12 months, but some start immediately.
Most retailers, meanwhile, have eliminated expiration dates and fees, and some offer discounts for people with gift cards, says Dan Horne, a marketing professor at Providence College who specializes in gift cards. His advice: Unless you have absolutely no clue what someone wants, "a retailer card not only is a better option, it also shows a little more thought," he says. "Open-loop cards are real close to cash."
