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Choose Wisely With Gift Cards This Year

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By HERNANDO TODAY STAFF

The Tampa Tribune

Published: November 29, 2008

Updated:

If you just re-discovered the gift card in your wallet — lodged in between the movie stubs and tattered coupon — you're not alone.
An estimated $8 billion in gift cards were unredeemed in 2006 and a quarter of the people who received a gift card in 2007 still have not used it, according to consumerreports.org.
Even so, surveys show that 66 percent of the people polled planned to give at least one gift card this year, up from 62 percent last year.
But wait, what about all the companies going bankrupt? Seems there's an e-mail making its rounds warning shoppers to redeem those gift cards "before it's too late."
Attached is a list of about 30 different national stores that are supposedly going out of business. And it's partly accurate. But the e-mail fails to mention that most of the chains are only shutting a portion of their outlets and actually building new stores in other locations.

Also, some of the information in the e-mail is nine months to a year old. Sharper Image, for example, began bankruptcy proceedings in February. Circuit City filed for Chapter 11 bankruptcy protection this month, but is still honoring its gift cards.

One idea under consideration by the Federal Trade Commission is to create a gift card trust account. Profits from gift card sales would go into that account so that consumers would still have a way to claim their card if a company goes belly up.

Until then, the FTC offers these suggestions before buying a gift card:

• Buy from sources you know and trust. Avoid buying gift cards from online auction sites, because the cards may be counterfeit or may have been obtained fraudulently.

• Read the fine print before you buy. If you don't like the terms and conditions, buy elsewhere.

• Consider fees that may be deducted from the card, including activation, maintenance or transaction fees. It might be embarrassing to give someone a $50 gift card and find out later that fees gobbled up most of the amount.

• Give the recipient the original receipt to verify the card's purchase in case it is lost or stolen.

• Consider the financial condition of the business and whether it has filed for bankruptcy.

If you buy a card from a company that goes out of business or ultimately files for bankruptcy, the recipient may end up with a card that's worth less than the face value.

A company that files for bankruptcy may honor its gift cards. A competitor may also accept the card. Call the retailer or competitor to find out. Even if a company currently is not redeeming gift cards, check with them periodically; they may resume doing so later.

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