• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Gift Cards May Send Unhappy Sentiments

Posted on: Thursday, 22 December 2005, 15:00 CST

Now, I'd like to add one more bah-humbug to those buy-anything-use-them-anywhere gift cards. Make mine a double bah-humbug.

What's worse than paying up to $6 extra _ and possibly some hidden fees on top of that _ for a $25 gift card?

Well, guess what? I even had a hard time buying some stuff with one of these use-them-anywhere gift cards. This gift card created so many hassles at the cash register that I found myself pining for the days when somebody would send you a fruitcake.

I wouldn't have believed it, if I hadn't seen it myself. But it gives me another reason to warn consumers during the final holiday shopping rush about the hidden tricks with some all-purpose gift cards issued through MasterCard, Visa and American Express.

Sound like a great gift?

Not if you ask Jean Nash. She got a $15 gift card last year from a co-worker at a Value City Department Store in Warren, Mich. It was issued by Charter One Bank and supposedly could be used anywhere.

"It was infuriating," said Nash, 74.

The Warren woman tried to buy something twice at a Home Depot, and both times the card wouldn't go through. The bill was more than $15.

And as the card sat in her wallet for months, the value kept falling because the card wasn't being used. Yes, some cards have what's called an inactivity fee that can kick in within six months or later after buying the card.

Nash didn't know this, of course, until she called the 800 number to find out where to use the card.

Then she learned that her $15 card was then worth $5.

"I lost $10 by not using it," she said.

So she gave last year's holiday gift card to the bank.

"I sent it back to them, so they could use the last $5 as well," Nash said.

Jacqueline J. Wiggins, vice president and director of public affairs for Charter One in Detroit, noted that the specific type of gift card Nash received has since been discontinued.

Wiggins said the current gift cards issued at Charter One branches don't have any fees _ except for the $3.50 fee to buy the card. Card values range from $25 to $500.

The latest Charter One gift cards, which are sold only to bank customers, do expire in two years. But the value on the card won't decline during that time if the card is just sitting in your wallet.

And Wiggins said a gift cardholder also could request his or her money back, at no fee, after the card has expired.

She also said the new card does allow a merchant to split transactions _ let a customer use the Charter One gift card and another form of payment to buy something.

Yet if you think Nash's experience is some unheard-of glitch, guess again.

You could have to jump through hoops to use many of these all-purpose gift cards.

Robert Sherman, a spokesman for American Express Travelers Cheque and Prepaid Services in New York, said it is possible for an American Express gift card to be rejected if you're trying to buy something for $30 with a $25 gift card but want to use a credit card to cover the extra cost.

"It's essentially up to the merchant," Sherman said.

He recommends that consumers keep track of how much money they have on their gift cards _ and then tell the clerk that a card has a certain amount. The merchant might do a split tender.

The key issue is: Will the store where you shop allow you to use the money on the all-purpose gift card and then pay the rest owed with cash or a credit card?

Now, some credit card experts say some store computer systems allow clerks to be able to do these split transactions, but some clerks might not know how to do them.

OK, when all else fails blame the person who is running a register and struggling the hardest to feed her family? I wouldn't blame any clerks for this one.

Consider my experience. I picked up a $25 MasterCard Gift Card at Kroger this month as I was working on another column about gift cards. I paid $27.49. Charter One Bank issues that card.

The first two times I tried to use it, everything was fine.

I bought a pop at the store in our office building and a snowman ornament at a card shop. Nothing weird. I even was able to quickly check up on my balance at no charge.

But here's the zinger: I went to Target.

I was buying a small Hello Kitty stamper, a man's gray turtleneck, a man's burnt orange thermal crew and a cheap pink turtleneck for me. The bill: $33.89.

I had $18.15 left on this MasterCard gift card.

So I'm thinking I can swipe the card, as you might with a store gift card, use the entire $18.15 on the gift card and pay the rest on my credit card.

Oh, no. The machine at Target rejected my use-it-anywhere, MasterCard gift card.

And some consumers have seen that same thing happen at other stores, too.

Chris Brathwaite, a spokesman for Sears Holdings in suburban Chicago, explained one problem to me _ and offered one solution.

Brathwaite said the payment system at Sears can accept only one credit card per transaction.

And a Visa or MasterCard gift card would be treated as a credit card by the system.

But Brathwaite suggested one way a customer can buy a $50 Lands' End sweater at Sears, if he or she has $25 on an all-purpose card and can pay for the rest.

Solution? Have the clerk first figure out the total bill with tax. Then buy a Sears gift card that could cover whatever you'd owe after using the $25 all-purpose gift card.

Then use the Sears gift card first and hand over the $25 all-purpose gift card to buy that $50 sweater.

Keep that one in mind if you get one of these cards.

Lucky for me, I knew the clerk at Target. And there wasn't a line.

She had another idea. She re-rang my purchases. So two items went on the MasterCard gift card for $14.83. The other two items went on my regular credit card at $19.06.

So let's consider this: I'm left with $3.32 on my MasterCard Gift Card.

I pulled it out again when my 7-year-old son and I went to McDonald's.

It initially got rejected.

The food cost $3.39.

So I put in another order. And I spent another $3.29.

Now, I have 3 cents left on that card.

Thanks to that Sears guy, I might be able to figure out one way to use it. Get another store gift card and combine it with my 3-cent card?

I'd hate to give the all-purpose gift card people my extra 2 cents _ plus a penny. Wait a minute, maybe I just did. Merry, merry. Happy, happy.

___

KNOW THE RULES, COSTS, PENALTIES OF YOUR ALL-PURPOSE GIFT CARD

Many gift cards, including those issued by American Express, Visa and MasterCard, come with instructions or terms and conditions. Read up on the rules for your card.

Some all-purpose gift cards, including the American Express Gift Card, cannot be used at hotels, car rentals, airlines, casinos or ATMs.

You might have trouble buying gas or face up to a seven-day hold on your money if you try to pay at the pump with some all-purpose gift cards. Pay for the gas inside the station.

Some cards also allow a hold to be put on money if you use the gift card at restaurants or other spots where tipping is common. The hold could last up to 10 days.

You often cannot add money or reload many of the holiday, prepaid gift cards, like the one from American Express.

If you have trouble with a card, keep trying to use it. Some cards will charge monthly fees after six months or later. The MasterCard Gift Card sold at Kroger charges $2 a month from your available balance beginning in the 13th month after you buy the card, except where prohibited by law.

Go to the Web site for the gift card to learn rules. For example, you can read rules under frequently asked questions for the American Express Gift Card at www.AmericanExpress.com. There's an 11-page print out available to guide you about how to best buy the card and how to best use it.

___

(c) 2005, Detroit Free Press.

Visit the Freep, the World Wide Web site of the Detroit Free Press, at http://www.freep.com.

Distributed by Knight Ridder/Tribune Information Services.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: Detroit Free Press

More News in this Category