Buyer beware: Watch out for gift card “gotchas” during the holidays

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MADISON (WITI) — Gift cards are a big hit for shoppers and gift recipients alike. That’s because they’re available everywhere and prized for their convenience.

But if gift cards are on your shopping list this holiday season, the Wisconsin Department of Agriculture, Trade and Consumer Protection suggests that you follow some simple tips to ensure that both you and the gift recipients receive the full value of the present.

Text message and social media scams from the past couple of years promise a $500 or $1,000 gift card from a major retailer in exchange for completing a survey or paying a shipping charge. Within the message is a link to start the redemption process, but clicking that link will load malware to your device or send you to a site that is set up to capture your personal or banking information. If you receive a similar message, delete it and do not click any links.

It is best to buy gift cards directly from the retailer or from an authorized merchant, but if you are considering buying an unused card second-hand, purchase it from someone you know and trust. Used or unwanted gift cards show up for sale online through auction sites and classified ads, and while some cards may be legitimate, others may be counterfeit, may be drained of their value, or may have been stolen from a store and never activated at a register. If the gift card merchant discovers that your card is fraudulent, the merchant will deactivate the gift card and refuse to honor it for purchases.

Consider these additional tips to ensure that the user gets the full value of the card:

  • Inspect the packaging before you purchase a card to ensure that no protective stickers have been removed and that the pin number has not been exposed. Report any damaged cards to store management.
  • Read the fine print on the card to ensure that you understand any rules on usage and any associated fees. Federal rules require fees to be disclosed prior to purchase. Dormancy, inactivity and service fees are allowed only if the recipient has failed to use the card for more than one year. After that, fees are limited to one per month, but there is no limit on the amount of the fee.
  • Always give a gift receipt with the card to verify its value and the date of purchase. Make sure gift recipients hold onto their receipts until they have spent the entire value of the cards.
  • Keep your cards safe. Make a copy of the front and back of the card and keep it with the original receipt. Contact the issuer immediately if you lose a card or if it is stolen, but be aware that you may not be able to replace it. Some issuers may replace the card for a fee.
  • If your loved ones or friends shop online, consider giving them electronic gift cards by email rather than physical cards. Many retailers offer this gifting option and the messages can often be customized with personal messages or images. These cards can be saved in an email account for future use without fear of losing or damaging a physical card.
  • If you receive a gift card, try to use it right away to ensure that you receive the card’s full value.

For additional information or to file a complaint, visit the Consumer Protection Bureau at, send an e-mail to or call the Consumer Protection Hotline toll-free at 1-800-422-7128.