BBB: Gift cards and new buying trends
A survey last year from financial publisher Bankrate found more than half of us intend to buy at least one gift card as a present, but only 27 percent of people prefer to receive a gift card as opposed to a tangible item.
"Gift cards have been one of the most popular holiday presents for decades and that has not changed," according to Connecticut BBB spokesman Howard Schwartz. "What has changed is the way consumers intend to spend money this holiday season, whether they buy a gift card for someone else or for themselves. That freedom is one of the reasons for cards' popularity."
The market research company NPD Group's 2017 Holiday Purchase Intentions Study reveals 39 percent of consumers plan to purchase so-called experiential gifts this holiday season. Those are gifts such as wine tastings, concert tickets, and spa treatments, and gift cards are a convenient way to pay for those.
Gift cards are also popular with retailers. Historically, three out of four people spend more money than the value of the card.
If you receive a gift card as a present but don't want it, there are websites that allow you to buy or sell gift cards. Cards with the highest trade-in value are from gas stations, retail chains and grocery stores. They usually sell for 80 to 90 cents on the dollar, while less popular cards can go for half their face value or less. Check out gift card exchange websites at bbb.orgto verify if they are legitimate and have any complaints.
BBB offers some tips to help you get the most out of your gift cards:
- Buy them where an employee can see them — If the gift cards are on a rack out of view — a thief can tamper with them, transfer the value of the card and then return it to the rack.
- Use them or lose them — As much as 10 percent of gift cards are never redeemed because they get misplaced, forgotten or lost. Another reason to use them as soon as possible is in case a business shuts down and the card cannot be used.
- Treat your card like cash — If the card is lost or stolen, contact the issuer immediately. Some will re-issue a card for a fee but others will not. That is another reason to include the original receipt with the gift card before you give it.
- Be very careful buying from an individual — If someone is selling gift cards online through a classified ad site for example, you risk buying a stolen, counterfeit or empty card without any opportunity to get your money back in the event of fraud.
- Some cards have fees — This applies to cards issued by banks. They can charge fees for inactivity if they are not used within 12 months. In contrast, under Connecticut law, gift cards cannot have an expiration date or inactivity fees, even if the card is purchased from another state.
Find additional holiday tips at bbb.org .