Did you get a gift card in your holiday stocking? Better not just put them away and forget, or else you may be left with nothing.
They have become one of the most popular gifts during the holidays, gift cards. This year shoppers will spend $17 billion on the plastic presents. The cards allow people to get something they want. Gift cards also make things easier, but what isn't so obvious is that the value of these cards can decrease if not used.
A growing number of companies charge fees on their gift cards. Take this one from Mall of America. It starts to decrease in value by $2.50 a month after just 6 months. Barnes and Noble charges $1.50 monthly after 12 months of non use; Starbucks, $2 a month after a year.
Many retailers use 3rd party companies to implement gift card technology for the retailers. These 3rd party companies charge retailers when the gift cards go dormant, and those fees are often passed on to consumers. The dormant fees are also meant to induce people to use the cards as soon as possible, because retailers cannot report the sales until the gift card is redeemed. The retailer makes no money unless the gift card is used. Still some retailers, like the GAP, choose not to pass on the fees and their cards don't expire.
The bottom line, buyer beware. Read the fine print, so you're not left with a worthless piece of plastic. Most company websites explain their gift card policies. For a comprehensive list of fees charged by nation-wide retailers (click here).