What You Should Know About Gift Cards

It can be hard to realize today, but there was a time in the not too distant past when gift cards were frequently looked down upon. Sure they were easy to give, but a physical gift seemed much more personal. Overall, it didn’t take long for both givers and recipients to appreciate gift cards more and more. They are easy to wrap, versatile, could be purchased in any amount and the receiver could choose a gift of their choice.

There are, however, some things about gift cards you should take note of.

Businesses Love Them

Businesses love gift cards because you are, in essence, lending them money for free. Each year, millions of dollars sits unclaimed on gift cards that the business has access to. In addition, estimates say that 20% of gift cards will not be redeemed in the first year, and 5% may never be redeemed.

Gift Cards are Regulated

Gift cards are regulated by Federal and State laws that can determine how long they are valid. Federal laws mandate gift cards must be redeemable for up to 5 years, but regulations in certain states can allow for “inactive fees” to eat away at the balance on those cards. Check the regulations in your state, especially if you have recently discovered an unused, older gift card.

Read the Fine Print on “Bonuses”

Because gift cards are so financially beneficial to businesses, many offer “bonuses” for their purchase. Buying a gift card could net you a ten, twenty or thirty percent bonus, but be careful. These bonuses can come with restrictions regarding how and when they can be redeemed. While a gift card purchased may be redeemable for five years, the bonus amount may expire after 60 or 90 days. Read the fine print.

Choose Carefully & Wisely

While a certain department or grocery store or even a gas station may be popular where you live, they may not be available where the recipient lives. Choose a versatile gift card that can easily be redeemed where the recipient is located.

Today, gift cards are easy to give and well received. They no longer carry a stigma of a gift given out of convenience.

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