Gift Card Gift Card

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					G      ift cards have become very
     popular because they are a
    convenient way to give or
receive gifts. Persons receiving gift
                                         IsIf you have a complaint about your gift card i s s u e r ,
                                           w r i t e o r c a l l y o u r s t a t e ’ s Consumer Protection



                                        aGift
                                           Bureau or Consumer Protection Agency and file
                                           a complaint with the Federal Trade Commission
                                           (http://www.ftc.gov/ftc/consumer.htm) . You can
                                                                                                              Is
                                                                                                             aGift
cards can choose for themselves            also file a complaint with the Better Business
what they wish to buy, while gift
givers can avoid making difficult                Card
                                           Bureau (http://www.bbb.org/).

                                                                                                                     Card
                                        Rightfor                                                             Rightfor
                                                                        ?                                                           ?
(and    sometimes     unsuccessful!)
decisions. There are some points
you should consider to ensure that
a gift card is right for you.
       Gift cards, which are elec-
                                             You                                                                  You
                                                                                                               Know the costs and benefits
tronic versions of gift certificates,                                                                                     before you buy
can be purchased at a specific retail
chain, such as a department store
or supermarket, or from a group of
retailers such as a shopping mall.
Some gift cards, such as those
issued by banks, have a Visa,
MasterCard, American Express, or
Discover logo and can be used
almost anywhere that the particu-
lar brand is accepted. Gift cards
                                                               Federal Reserve Bank of New York
are easy to obtain and easy to use.                            33 Liberty Street
                                                               New York, New York 10045-0001
Giving or receiving gift cards is                              (212) 720-5000
often preferred over cash.                                     www.newyorkfed.org                            Federal Reserve Bank
                                                                                                                 of New York
                                         02/06
If you’ve got a gift card in your wallet                         How gift cards work                                         What happens if your card is damaged,
or are thinking about giving a gift                              A typical gift card has a magnetic stripe on the back of    lost, or stolen?
                                                                 the card. When you purchase the card, the amount of         I   Will the card issuer replace your card if damaged,
card, you should know…                                           money that you put or “load” onto the card is recorded          lost, or stolen? Is there a charge for card
                                                                 in a database that can be accessed by swiping the card          replacement?
                                                                 along its magnetic stripe.
There may be costs associated with obtaining
                                                                                                                             I   Will the card issuer replenish the remaining funds
                                                                   You or someone else can then make a purchase using
                                                                                                                                 onto a replacement card? If so, do you have to pay
or using a gift card                                             that card. When a purchase is made, the cashier will
                                                                                                                                 a fee to put these funds onto the new card?
I   Before purchasing a gift card, be sure to ask about all      swipe the card and deduct the amount of your purchase
                                                                 from the card.
                                                                                                                             I   Do you need to register the card with the card issuer
    the possible fees that may be charged. All cards are
                                                                   In addition, some gift cards allow you to withdraw cash       for the funds to be protected against damage, loss
    different: some have no fees at all, while others may
                                                                 at an ATM. This kind of card requires that you use a PIN,       or theft?
    have fees for purchasing or using the card.
                                                                 or personal identification number, that you will use at
I   If the card allows cash withdrawals at an ATM, fees          the ATM to withdraw cash from your card.                    What happens if you want to make a
    may be charged each time the ATM is used. In addi-             Some cards are reloadable—in other words, you             purchase greater than the dollar value on
    tion, the ATM operator may charge a fee for usage of         can add more money to the card after it has been            the gift card?
    that ATM.                                                    purchased.
                                                                                                                             I   Will the retailer/merchant accept the value on the
I   If the card allows you to add more funds, you may be
                                                                                                                                 gift card plus accept cash, a credit card, a check, or
    charged a fee each time you do.                              Read the terms and conditions before                            a debit card to complete the purchase?
                                                                 making a purchase*
The gift card may lose value over time
                                                                 The terms and conditions provide important                  How can you obtain information about
I   If the card is not used for a certain period of time, such   information about:                                          the balance on the gift card?
    as six months, you may be charged a dormancy or              I Card expiration date
    non-use fee for each month after that.                                                                                   I   Is the balance information provided to you when you
                                                                 I Card purchase fee
                                                                                                                                 receive a purchase receipt?
                                                                 I Pre-funding (loading funds on card) fee

If your gift card is lost or stolen, you may not                 I Per transaction fee
                                                                                                                             I   Do you have to call customer service? If so, is there
be able to replace it                                            I Non-use (dormancy) fee                                        a charge or fee to use telephone customer services?
                                                                 I Re-activation fee                                             Is the balance information available from a website? Is
I   Some issuers may not replace your card if it is                                                                          I

                                                                 I Card replacement fee                                          there a fee to access this information from a website?
    damaged, lost, or stolen, or they may charge you
                                                                 I Funds transfer/card replenishment (reload) fee
    for replacing it.
                                                                 I ATM fee
                                                                                                                             Does your retailer/merchant provide you
                                                                 I Monthly maintenance fee
                                                                                                                             with a customer service phone number,
                                                                 I Customer Service fee

                                                                 I Lost or stolen card replacement
                                                                                                                             website address, or mailing address you
                                                                                                                             can use if you have questions about your
                                                                 *The list of terms and conditions is meant to provide you   gift card?
                                                                 with help in choosing a card that is right for you. State   I   If a customer service phone number is given, is it a
                                                                 laws may disallow certain fees charged by gift card             toll free number? Are you charged a fee when you
                                                                 issuers. Be sure to check with your state’s Consumer            call customer services?
                                                                 Affairs or Consumer Protection Department to learn
                                                                 more about specific laws and regulations related to
                                                                 gift cards.

				
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posted:7/16/2011
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