December 15 - Smart Tips About Gift Cards
| Many people find gift cards to be a convenient and thoughtful way to allow friends and family to choose their own presents at the holidays. While this may be true, the Georgia Society of CPAs warns of some potential pitfalls to be aware of when giving or receiving a gift card. KNOW THE SELLER If you’re buying a gift card to give to someone else, you want to be sure that the recipient will be able to use the card as intended. That’s why it’s particularly important to purchase cards only from reputable sellers. The Federal Trade Commission warns in particular against buying from an online auction because the card may be fake or may have been fraudulently obtained. Even if the card is legitimate, during troubled economic times you also want to know that the company itself is in good financial shape and unlikely to go out of business before the card can be used. If you hear about a possible bankruptcy at a major retailer, it’s a good idea to redeem any gift cards from that company right away and to avoid buying any more cards from them. CHECK THE FINE PRINT Whether you give or receive a card, examine the terms and conditions so that you or the recipient can make full use of it. For example, if the card was issued by a chain, can it be used in every store or only in the one where it was purchased? Is the card restricted to certain goods or services or can it be used for any purchase? And, most important, does the card have an expiration date? If it does, it’s important for the recipient to be aware of it so the card doesn’t expire before it can be used. The store may agree to extend the date on an expired card, so it’s worth asking if you are in this situation, but be aware that they may charge a fee for this service. ASK ABOUT FEES In some cases, you may find the card may not be worth exactly what the buyer paid for it. That’s because certain expenses may be deducted when it’s used, including purchase fees, transaction fees, inactivity fees and shipping and handling costs. If you are buying the card to give as a gift, ask about these fees and whether the recipient will be stuck paying them. If you receive a gift card, check the terms and conditions to see if you can spend the card’s full face value. TREAT THE CARD LIKE CASH All stores will not automatically replace a gift card if it lost or stolen. In fact, you may be out the money in this situation. Try to report the loss to the store as soon as possible, and inquire about their policies. It will help your case if you have the original receipt for the card as well as the card’s identification number. YOUR CPA CAN HELP Buying the right gifts at the holidays is important at a time when everyone is trying to get the most mileage from every dollar. Your local CPA can provide advice on creating a realistic budget and spending your money wisely. Consult him or her with all the financial questions facing your family. # # # Produced in cooperation with the AICPA. ©2008
|