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If you're buying a gift card, here are the first things to beware of. Watch out for fees and expiry dates. Depending on where you live, this might be a non-issue, however. Here in Canada, if you live in Ontario, BC or Manitoba, it's against the law for an issuer to attach either fees or expiration dates to gift cards, and that may expand to the rest of the country. If you live in the USA, you don't have that protection, so do your research before you buy a gift card.
This has been said already, but it bears restating. Unless you're cool with throwing away your money, make sure you match the gift card to the person. Buying a gift card from a sporting goods store for someone who never plays sports is only doing the merchant a favour. In 2006 merchants made over $8 billion in the U.S. alone on cards that had never been redeemed.
Beware of Some Gift Cards!
Here's a new wrinkle in gift card giving. Thanks to the recent economic downturn, many retailers may go bankrupt, it they haven't already. If they do, their gift cards are worthless. You can't redeem them, or get their face value back. So it might be wise to restrict your gift card buying to merchants that will be able to hang tough for the next while.
Retail Gift Cards
Watch out for prepaid gift cards offered by banks or credit card companies. They seem like such a great idea, giving the user a wide variety of places to use it, but there are often tons of limitations on them, as well as some crazy fees. Do yourself a favour and read all the fine print before you hand over your money. Or forget the prepaid card and give the cash to the person you are planning to give the gift to.
