Penn State Live - Gift cards offer convenience, cautions for last-minute shopping

Gift cards offer convenience, cautions for last-minute shopping

Friday, December 19, 2008

University Park, Pa. -- Instead of launching a quest for the perfect gift, many last-minute holiday shoppers are saving time, energy and aggravation with one of the season's hottest item -- the gift card. But a consumer-issues specialist in Penn State's College of Agricultural Sciences says both givers and receivers should be aware that there can be more to gift cards than meets the eye.

"Gift cards take a lot of pressure off of the giver," said Cathy Bowen, associate professor of agricultural and extension education. "They also make things easier for the recipient, since there is no need to take something back to the store."

Although many believe gift cards are the perfect present, cards issued by banks and credit card companies may have a number of fees. Often, these include maintenance or dormancy fees if the cardholder does not use the card within a certain time period.

"If you go too long without spending your gift card, you could end up with a zero balance," Bowen said. "The easiest thing to do is keep the card in a place where you will see it and remember to use it."

Some banks and credit card companies also charge a fee for checking a gift card's balance. Bowen suggests that understanding the fine print associated with the card is a must for knowing the implications of gift card fees. "If you are purchasing a gift card for someone, make sure the recipient also understands the implications of any fees," she said.

Gift cards purchased from a single retailer are much less likely to have this drawback because a vast majority of major retailers do not have fees or expiration dates associated with their cards. Mall gift cards, however, often have multiple fees like those issued from banks.

Bowen says it may be better for shoppers to purchase a mall gift card than one from a single retailer when they do not know the hobbies or consumer habits of someone on their list. "If you don't have a clue or don't have the time to shop for a specific gift, a mall gift card or gift certificate will give the recipient a lot of choices," she said.

In spite of those pesky fees, Bowen says gift cards are a great way to save time, energy and money for those with a lot of people on their list this holiday season. "Because you give the specific amount you choose to put on the card, you really have the opportunity to stick to a budget," she said.

People can mail gift cards across the country at a minimal cost, she added, making them a cost-effective way to give to faraway relatives. "A gift card is also a great last-minute gift idea for that person you just remembered to put on your list," she said. According to holiday trends, most consumers purchase gift cards as a last-minute present.

Bowen also suggests gift cards as a great option for those who cannot shop due to health reasons. "You could have a friend go to the stores and get the gift cards for you," she said. "Or, you can purchase them online."