Gift Cards gaining popularity but many come with hidden fees

Finding just the right gift for a friend, family member or business associate can be a tricky assignment this holiday season. In a weakening economy consumers are less likely to want to throw money away on a gift purchase that does not satisfy the receiver and instead will give a gift card which offers choice and flexibility.

Last year $8 Billion worth of gift cards went unused. Either forgotten, lost or the full value not spent.

Despite the convenience consumers may be surprised to find out that many gift cards come with hidden fees, security risks and expiration dates.

A large number of cards including those issued by shopping centers (for exclusive use in a specific location) as well as retailers are good for one year and then expire---meaning the value is lost. Some can be renewed for free others with a nominal charge of $2.00- $5.00.

Additionally, shopping center cards which are issued by banks, (US Bank being a major supplier of such cards to malls owned by Simon Centers for example), charge up-front fees to purchase and in many cases are not governed by credit card laws and protections offered by various states. Further some of these cards charge a monthly service fee after the first year, (deducting that amount from the card's stored value each month).

Consumers need to do the due diligence and thoroughly check the terms of a gift card before buying. The problem is most buy these cards at the last minute as an impulse purchase and do not have or take the time to do this research. Card issuers take advantage of this situation in my opinion.

Finally, thieves do big business "stealing" value from these cards at this time of year. How? If you purchase a gift card that's been sitting with "no value" on a display rack easily available to the public, you might be surprised to learn that thieves capture the card numbers on these cards before activation and frequently check online to see when they are activated and can extract the value for their own use. The way to protect against this circumstance is NOT buy a gift card that is open to public view and touching and instead request one that is in storage or not accessible to passer's by.

Watching out for you everyday.

Eli