Gift Cards Often Carry Hidden Fees - KLTV.com - Tyler, Longview, Jacksonville |ETX News

12/23/04-Tyler

Gift Cards Often Carry Hidden Fees

Gift cards: An easy solution this holiday season, but the present may not actually give as much as consumers think. Gift cards are expected to be the hot item for the holidays this year, but the slick piece of plastic can often carry hidden fees.

More so than retailers, bank gift cards often come with activation and monthly fees. Consumers can end up feeling like they've been taken advantage of because they were not expecting any added fees.Gift cards are expected to be more popular this year than clothing.
"I give gift cards because I don't tend to know what family members want for Christmas and stuff like that so I like gifts cards," said Andy Rogers.
"I do," said Russell Polvado about giving gift cards. "Especially people that are hard to buy gifts for. It's just an easy thing to give."
"If you're sending it to someone, I'd send them a gift card instead of cash instead," said Keeli Anders.
Retailers and banks are fast peddling the gift cards, but buyers beware, with the purchase of many gift cards, come activation fees and penalties.
"I didn't know about that so apparently I've been ripped off a couple of times, but I didn't know," said Russell.
Toys R Us gifts cards have no starting fees but "to cover administration costs, a $2.00 per month dormant account fee will be deducted from your account balance after 24 months of non-use...." The information is found on the back of the gift card.
"I wouldn't want to buy it if it had an activation fee," said Keeli. "I mean you can give someone money for that instead of paying an activation fee."
One bank offering gift cards to customers is Bank of America but you have to apply for the card, online. Once you get to the website, be sure to scroll to the bottom of the page.
Like a credit card, the Bank of America Visa Gift Card includes a start up fee ranging from $5.95 to $11.95 to buy the card, but after you make the purchase the fees don't end there. The "...gift card expires 18 months from the date of issue....(Bank of America) assess a monthly maintenance fee of $2.50 which is waived for the first six months after the gift card's issue date."
"I guess I can kind of see where they are coming from," said Andy. "If you are not going to use a gift card right away I guess I can see how they'd want to deduct money after a certain time period."
The Prepaid Mastercard Good 2 Go Card carries a $9.95 activation fee. It's all in the fine print on the back of the card. If you look closely, you'll find there is in fact "a one-time activation fee of $9.95 that will be added to your purchase." and after the card is activated "a low monthly fee of $4.95 applies. Other fees may apply. Fees subject to change."
So if you are planning to give a gift card this holiday, make sure you to read the fine print and ask questions at the counter. That will help keep your holiday jolly and your gift merry.
A new survey found that consumers will spend more than $40 billion on gift certificates this year. Again the companies KLTV found that do have some type of condition, such as activation fees with their gift cards are Toys R Us, the Bank of America Visa Gift Card, the Prepaid Mastercard Card, and the Simon gift card. The Simon gift card can be used at the Broadway Square Mall and the Longview Mall.
Just a few of the companies that do not have conditions applied to their cards are Barnes and Noble, Starbucks, Foley's and Target.

Again those are just a few of the companies KLTV was able to check with. Consumer reports advises you check with any company before you buy a gift card.

Maya Golden reporting, mgolden@kltv.com

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