Gift Cards Becoming More Consumer-Friendly November 11, 2009 Study finds that fees, expiration dates on retailer gift cards have become virtually non-existent
By Alex Palmer
Retailers are striving to make their gift cards more shopper-friendly, according to the "2009 Gift Card Study" released today (Nov 11) by Bankrate, Inc. The company, which owns a number of Web sites aimed at informing consumers on financial matters, saw a continued effort from card issuers to make gift cards easier to redeem, as well more enticing to use.
Expiration dates and fees now seem to be a thing of the past. None of the 25 major retailers, e-tailers (Amazon, eBay and iTunes) and restaurants surveyed charge a purchasing fee for cards (though Starbucks charges a $1.50 handling for online purchased cards), and none carry expiration dates.
"When we started (in 2004) there were lots of fees and expiration dates and all kinds of hidden things you had to look for," said Ellen Cannon, managing editor of Bankrate.com. "But over the past few years retailers have done away with all of that. Retailers want you in store with that card in hand."
The new Credit CARD Act passed in February 2009 has also likely contributed to the increased focus on gift card friendliness. The act requires that gift cards not expire before five years, though it does not impose prohibit inactivity fees for those who don’t use their cards within a certain period of time.
Credit issuer, or open loop gift cards, are not quite as kind to the consumer, with all four surveyed providers--AmEx, Discover, MasterCard and Visa--charging a $3.95 purchase fee. The survey also found that three credit issuers charge a $2.50 maintenance fee every month after the card has been inactive for a year.
The report cautions consumers to be sure their cards can be used online. While this is not an issue for most retailers, major brands including CVS, T.J. Maxx and Marshall’s do not allow online redemption.
"I think that's more of a technical issue--their gift card business is separate from their retail business," said Cannon, pointing to the example of Lowe’s, which had not worked online but now can. "They're revamping their computer systems to allow these things to happen. Retailers are doing a great job trying to make these as friendly and useable as possible for consumers."
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