Gift card rules

Seven On Your Side
December 8, 2008 2:46:25 PM PST
They are a convenient gift and save you the trouble of finding the right size. But gift cards come with perils, that could cost you every buck if you don't know the rules. Morton Ostrowsky has a handful of gift cards. All say they're worth $25 bucks apiece. But now, the recipient told Seven On Your Side's Tappy Phillips they're worthless.

"I put them in my dresser drawer and unfortunately forgot about them," said Morton.

While the gift cards sat in Morton's dresser, the value dwindled to nothing. Like some retailers, Shell gift cards had an inactivity fee. After a year of inactivity, Shell started debiting his gift cards a dormancy fee of $1.75 a month.

Consumer Reports Magazine says it's not a big fan of gift cards. The reason? 8 billion dollars in gift cards went unredeemed last year alone.

"We just did a holiday poll and found that 25 percent of the people we surveyed still had a gift card from last holiday season," said Greg Doherty of Consumer Reports Magazine.

There are lots of reasons for that: people like Morton forget the cards, expiration dates or inactivity fees eat away at the balance, or in some cases the stores go out of business.

We took an undercover camera to Circuit City which has filed for bankruptcy. The clerk didn't know if their gift cards were still being honored. So we called the corporate office that told us they are closing ten stores in the New York area, but gift cards will still be good at the remaining stores and for shopping on-line.

As for Morton, Shell agreed to refund half the value of his expired gift cards. The Shell corporation told us that as of the beginning of this year, it stopped charging inactivity fees on their cards.

And if you end up with a gift card this holiday? "Our advice to people is if you get a gift card, get out and spent it and spend it to the last penny," advises Greg.

Also, keep those depleted gift cards, you might need them if you want to return something you bought with them. And remember, if you don't use a gift card, it's free money for the retailer. So if you have one, use it soon, before you start incurring fees.

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Story by: Tappy Phillips


Produced by: Steve Livingstone


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