Buying Gift Cards Advantages and Disadvantages

Buying gift cards is a simpler way of solving the problem of buying that special gift for someone.  This takes the stress out of trying to choose what the person will like and the risk of offending them. This is more prevalent when buying for distant family members. As you do not see them often you don’t know what they like or dislike, or how much the children have grown or what their interests are.

Gift cards allow you to choose from a number of different companies cards.  When dealing with long distances and different countries the suppliers of cards will differ from each area. Many companies have their own cards where people can buy their products.  You need to be aware of hidden costs and the risks involved when purchasing and using your gift card.

Visa gift cards can be bought online or in many stores around the world. These are great as people can often choose when and where they spend the money.   When sending gift cards internationally you need to be aware that there is a currency conversion fee of 2.5% for transactions for foreign countries.

Visa gift cards are also great to use as gifts for the traveler.  With the increased cost of fuel, it makes travel very expensive, therefore this gift would be appreciated and help enormously.

E Gift Cards

These can be bought online and are sent directly to your email inbox.  Companies supplying these advise everyone that spam filters may block their email, so need to check their spam box.  They should also contact the company if not received within a couple of days.

All types of gift cards are becoming more and more popular every year. You need to do your homework and find the one that suits you the best.  Here are a few suggestions:

Inter-store Gift cards

The specific inter-store cards are very good for their company and these normally will have less hidden charges and fees than others.

General purpose gift cards

These cards are usually supplied by the major worldwide companies. American Express, Visa and Master card, which are accepted everywhere.  They offer so many more ways of using it, like buying anything online through a variety of stores. You can use it while shopping locally, fueling your car, or buying your sporting or concert tickets.

Benefits for retailers

Retailers love gift cards as they gain more profit from these cards than people paying with cash.  Often customers will use a fifty dollar gift card and only spend thirty dollars. The customer either loses the card or forgets the unspent amount, therefore the retailer gains. So many cards are mislaid, therefore as the card is paid for in advance, the store gains from their loss.  This card also encourages new customers into their stores who often spend more than the original amount of the card.  It has been recorded that many of the prepaid gift cards purchased are never spent, which is not only a waste of the purchaser’s money but the receiver does not receive a gift after all.

Gift cards that are affiliated with major credit companies like American Express, Visa and Master card can be used anywhere. Although these cards have an expiry date and accrue fees and charges. Whereas retailers often do not have expiry dates.

Replacement cards often cost you money to have it replaced. Some even go as far as charging a fee if you have a credit balance on the card.

Retailers are charged a small fee to produce the gift cards.

Beware: I recently read an article in our local paper where a woman bought her aunt a fifty dollar Visa gift card. When presented at post office to use, she was told that it had to be validated. As the purchaser had not kept her receipt when purchasing the card from the post office, she had no proof. They checked with the bank and got the same response. Eventually after many days of anguish, they eventually validated it from their existing records at the post office. So make sure that this does not happen to you.

Can anyone use a prepaid gift card?

The answer is yes and why:

1. Anyone who does not like carrying cash

2. This would save paying credit card charges

3. Someone with a bad credit rating

4. Use these instead of traveler checks

Make sure you use it before it expires

Buy from the merchandiser

Keep your card in a safe place and make sure you use the complete value of gift card before it expires

Beware:

I have just read an article that say scammers are now copying the number in the magnetic strip to track usage of outstanding balances on the gift cards that are on display stands. So be very careful of the scams that are happening.