by Isabelle Esteves

Created on: November 02, 2008   Last Updated: March 10, 2012

Shopping can be very stressful. There are so many occasions that call for a gift;  the holidays, birthdays, anniversaries, weddings, showers and graduations, just to name a few. Gift cards have made life much easier for all of us. When you give a gift card you don't even have to know what the person might like.

American Express, Visa and Master Card all offer gift cards that are good at most places that accept their credit cards. You can get store cards, gas cards, telephone cards and dining cards just to mention a few. These seem like the perfect solution to gift giving but they come with some conditions that everyone should be aware of. Consumer Protection has raised some red flags and the FTC has even come up with a list of tips for consumers relating to the use of gift cards.

Be aware of the fact that some gift cards come with an expiration date. If you don't use the card by the expiration date, you will either lose the entire balance or be charged a dormancy fee that will eat up your balance. Some cards also charge an activation fee. Before you purchase any gift cards, read all the fine print so that the person who receives that card doesn't get hit with any unexpected charges.

When it comes to gas cards be prepared for a nasty surprise. The gas station considers a gift card to be a credit card when it comes to purchasing gasoline. It doesn't matter if it is one of their cards and of course has already been paid for. They are going to charge you the higher credit card price to use it. Certainly a win win for the gas station owner, not some much of a win for the gift card purchaser or recipient.

Before purchasing a gift card, verify that it can be used where you expect the recipient to use it. Not all cards are good at both the retail outlet and on the Internet.

Gift cards are cash and should be treated as such, if lost or stolen the number should be reported immediately to the issuing store or credit card company. That of course requires that you make a record of any gift card numbers that you receive. How many of us think to go that?

It is estimated that about 10% of all gift cards are never redeemed. 27% of gift card recipients admit to not redeeming at least one of the cards they received. Retailers love this fact; they receive the cash up front for the cards and never have to provide any merchandise. This has been a great boon to their bottom line.

Another pitfall of gift cards is that if you have a small balance left on your card there is a very good chance that you are never going to redeem it. For consumers. the best approach is to always spend the full amount of a gift card the first time you use it. This is the best way to cut down on possible loss of the card or just plain forgetting you have it.

Gift cards are a great invention. They have made our lives much easier and they have also made retailers very happy. Make the most of your gift cards by remembering the following rules.

Use your card quickly and use the entire balance.
Treat your card like cash, that is what it is.
Read the fine print to avoid unexpected charges
Don't buy a card with an expiration date
When in doubt give cash, it never expires

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