Be smart about giving gift cards

Gift cards can make flexible and easy holiday presents, but it’s wise to know a bit about the company before making a purchase.

There are generally two types of gift cards: store-branded cards and all-purpose cards issued by banks or credit card companies. In Oregon, state law says it’s illegal to reduce the value of a card, whether for inactivity, maintenance, service fees or other fees.

That isn’t true in other states, however. A recent Bankrate.com national survey noted that eight cards from banks and credit card companies had purchase fees ranging from $2.95 to $6.95. Of 55 store-branded cards surveyed, five had a purchase fee.

Federal law, according to the Federal Trade Commission website, says gift cards cannot expire within five years of purchase. Also, the expiration must be disclosed on the card and the fees must be noted on the card or its packaging.

When buying gift cards, the FTC and the Oregon Department of Justice recommend that shoppers avoid online auction sites, as there are regularly incidents of fake cards reported. Shoppers should also inspect the card to make sure the pin number hasn’t been scratched off or that stickers removed.

The government agencies also advised shoppers to give the card receipt to the recipient, who should verify the amount on the card with the first purchase. In addition, this will allow the recipient to still use it if it’s lost or stolen.

Shoppers should also be cognizant of the financial condition of the business, as well. If it goes bankrupt or closes, there isn’t any way to recoup money on unused gift cards.

Oregon law allows people to get cash back if their gift card has less than $5 of value left.

— Heidi Hagemeier, The Bulletin