CLEVELAND -- Gift cards seem like the perfect gift: you buy a plastic card with the amount of money you want to spend, and your family or friend gets to choose what to buy. Now that the holiday season is upon us, more and more people are purchasing them.
Gift cards are also big business for the stores that sell them. Last year, $4 billion in gift cards was never redeemed, which adds up to pure profit for retailers.
But when you buy one, make sure to read the fine print -- some companies are charging service fees on their cards.
Consumer experts say to use the cards you get and use them soon to avoid being charged the service fees.
"I would have a little envelope or something for a simple filing system for gift cards, use as quickly as possible," suggested Jay Seaton of Cleveland Consumer Credit Counseling.
The service fees are tacked on when the gift cards are not used before a specified time.
Circuit City charges a gift card fee, $2 a month after 24 months. Barnes and Noble charges a $1.50 a month after one year. Starbucks charges $2 a month after a year.
Mandy Walker, of Consumer Reports, suggested checking the card to see if has an expiration date.
"Many of them do, and if you hold onto them for too long, you could be stuck with a worthless piece of plastic," said Walker.
But some gift cards are better deals than others. For example, Gap cards have no fees and never expire.
It is also worth checking into the replacement policy for gift cards. Some companies will replace a card that's lost or stolen, but you need the original sales receipt and card number.
Distributed by Internet Broadcasting. This material may not be published, broadcast, rewritten or redistributed.
Visit Our Special Section
