As the holiday season approaches, gift cards remain a popular choice for their convenience and flexibility. However, both givers and recipients should pay attention to the fine print and understand the policies associated with gift cards to avoid potential issues. Here’s what you need to know about gift card protections, common scams, and safety tips.
Federal Protections for Gift Card Buyers
The Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act offers important protections for consumers purchasing store, restaurant, or bank-issued gift cards.
- Expiration Dates: Under federal law, gift cards cannot expire until at least five years from the activation date.
- Fee Limitations: Dormancy or inactivity fees can only be charged after a year of inactivity, and the card must clearly disclose such fees.
In addition to these federal protections, the state of South Carolina has its own laws providing extra safeguards for gift card users.
Beware of Gift Card Scams
Gift cards are often targeted by scammers because they function like cash—once spent, they’re difficult to trace or recover. Consumers should be on alert for these common scams:
- Fake Emergencies: Scammers may pose as lawyers or officials claiming a loved one is in trouble and needs payment via gift cards.
- Overpayment Scams: Fraudsters may offer to overpay for an item you’re selling, then request the difference in the form of gift cards. These checks often turn out to be fake.
- Imposter Requests: No legitimate business or government agency will ask for payment via gift cards.
If you encounter these situations, it’s likely a scam. To report a scam, contact your local police department and the FTC, which tracks fraudulent activity.
How to Protect Your Gift Cards
If you believe you’ve been scammed, take these steps:
- Notify the merchant or issuer immediately to report the incident. Some issuers may refund the remaining balance, though a fee may apply.
- Keep a record of the card number and receipt for verification.
- Report the scam to the FTC and consider filing a police report.
Tips for Buying Gift Cards Safely
- Purchase From Trusted Sources: Avoid buying gift cards from unknown websites, as they could be counterfeit or stolen.
- Inspect Before Buying: Check physical cards to ensure the codes on the back are intact and have not been scratched off.
- Read the Fine Print: Be aware of expiration dates, fees, and terms of use.
- Register Your Card: Some issuers allow you to register gift cards, offering additional protection if the card is lost or stolen.
By understanding these guidelines, you can ensure your gift card purchase is a thoughtful and secure choice. Don’t forget to share these tips with the recipient, so they too can make the most of your gift.
