Gift cards are a very simple gifting solution. Most people prefer gift cards as they are convenient options and easy to give. However, it is always better to check out a gift card before keeping it aside.
There are hidden charges on the gift cards for inactivity. They also come with the expiry date and this could render the card useless. Although state and federal rules do offer some protection to consumers, it is still better to watch out and play safe.
The wisest thing to do with a gift card is to spend it right away. There is no point in holding on to the gift card and let it just expire. Also givers of gift cards should weigh the pros and cons before giving away gift cards. One must always check to see if giving cash or check is a better option than giving away a gift card while drowning money on them.
The value of the gift card might become literally worthless if the fees eat into the value of the card. In some cases, gift cards might become worthless if the retailer files for bankruptcy. In such cases the card holder must file for a claim on time or risk losing the value of the card.
The Federal Reserve took some of the spunk out of the disadvantages of the gift cards. As per the new rules these gift cards cannot expire before a period of five years. The card issuers cannot charge any inactivity fee for one year. However, if the card is used partly then again the wait for a one-year period will have to happen before charging for inactivity.
Most states have added their own rules over and above the rules and regulations laid down by the Federal Government. For instance, Nevada has put a ban on any charges within the first year, as per the consumer union. The fees cannot exceed $1 per month. The cards will have to remain unused for 3 years before inactivity fees can kick in. However, these Nevada rules are applicable only to single retailers.
There are two types of gift cards available. One kind is from a specific retailer and it can only be redeemed there. The other variety is from the bank such as MasterCard or Visa and it can be used to make purchases from various retailers. These cards are sold at convenience stores as well as online.