Gift cards are really popular this time of year. But when you buy one, I want to make sure you — and your intended recipients — are protected.
Is your gift card going to be emptied before you even use it?
Gift cards sold off display racks at stores are becoming a hot target for scamsters around the country. Consumerist.com reports there are a number of scams going on where crooks have found a way to steal value from gift cards before they’re sold.
‘Sometimes this means scratching off the area on the back of the card to reveal the code. It could also mean peeking down the sleeve of the card to read and record the number,’ the website reports.
Using these methods, the crooks are able to drain the money on those cards before they can be used by the recipient. Worst of all, no one is taking responsibility. When the gift card giver or receiver contacts the retail store where the card was sold, or contacts the merchant which the card was for — suddenly, everyone washes their hands of it! The money is wiped out and the consumer is left stuck in the middle.
The warning here is clear as it can be: Do not buy gift cards from those multi-vendor racks at retail stores! Only buy gift cards that are stored behind the register or counter at a store. And as for retailers, why not consider moving the gift cards behind the customer service desk where they’re less likely to be tampered with?
Know the difference between good and bad gift cards
When you buy a gift card, you take real U.S. money that can be spent anywhere and turn it into money that’s only good at one retailer or restaurant. If that place goes bust, you are out of luck. That’s why I’ve never liked gift cards, despite how popular they are.
A lot of retailers are on death’s door and I expect we’ll see some go bust this January. So be very careful before you buy. My rule is only buy a gift card when you get more value than what you paid. Not the dollar-for-dollar kind.
If you go to the warehouse clubs, you can often buy gift cards where you get $120 in value at a restaurant for only $100. Anything where you get enhanced value is great. That’s a good kind of gift card.
Buying used gift cards can save you big money
Websites like CardPool.com, GiftCardGranny.com and GiftCardRescue.com offer you the opportunity to buy or sell unwanted gift cards. Sellers can typically expect to make about 70-80 cents back on the dollar. Buyers, meanwhile, can find gift cards discounted up to 30% off the face value.
I recently had a reason to contact CardPool on behalf of a Clark Stinks poster who said they bought a card and it had no value. CardPool said unequivocally they stand behind all cards. Should you run into any problems, they will reimburse you up to a lifetime amount of $1,000 in the event you ever get a card or a series of cards that don’t work from them.
In addition, CardPool’s cards are guaranteed to work for up to 100 days after purchase. Read the exact terms and conditions of whichever of these companies you use to verify their exact coverage.
For more money-saving advice, see our Deals section.