In recent years, gift cards have become an increasingly popular choice among consumers, with most large retailers now offering them. They come in a number of varieties including: cards that can be used to purchase goods or services from a particular store or retailer; those redeemable at a group of stores, such as a mall; and, more recently, credit card-branded gift cards that can be used anywhere that the brand of credit card is accepted.

Gift cards can be a convenient gift option, allowing the recipient to choose what they want, and when. They can also allow you to contribute towards the purchase of a more expensive item than you could afford to give on your own. However, gift cards can come with a variety of terms and conditions that you should be aware of before purchasing them.

Consider the following:

• Are there any restrictions on the card? Are there any limitations on what kinds of products or services may be purchased?
• Does the card have any fees associated with it that either you or the recipient have to pay, such as an activation fee, transaction fees, or inactivity fees if the cardholder does not use the card within a certain period of time?
• Can the card be returned for a refund if the person you are giving it to does not use it?
• Is your friend likely to use the gift card? Some people never get around to using a gift card or wait too long, only to find the card has expired or is worth less than the face value. Some companies make a lot of money because their gift cards are never used. Be sure your friend shops at the store where you are purchasing the card. If you are not sure, consider giving cash instead.

Be sure to ask the retailer about the considerations listed above before you purchase the card.

Gift Card Fraud

Many reputable companies allow you to enter a gift card's serial number on their website to check the balance remaining on the card. But be aware, there are fraudsters online who may try to steal the money remaining on your card. To avoid fake gift card balance websites, do not click on links found in pop-up boxes or in emails. Fraudsters often send authentic-looking email messages that appear to come from legitimate well-known companies. Search for the official company website in your search engine and navigate to the gift card balance page yourself. If you aren’t sure that a site is legitimate, contact the company directly using a number from the phone book or on the gift card itself. The contact information provided on the site, in a pop-up box or email message could also be false.

Laws or Regulations

Most provinces have introduced laws or regulations that include restrictions on expiration dates and fees, as well as improvements in the information the retailer must disclose before you purchase the card, such as restrictions on the use of the card. However, rules vary across provinces and territories, not all types of gift cards are covered, and not all provinces and territories have laws in place. To find out more check with your provincial or territorial consumer affairs office.

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