A study conducted by the Consumer Federation of America in October 2009 demonstrated the possibility that numerous consumers are harboring misconceptions about prepaid gift cards. The gift card market is a large market, with approximately $50 billion dollars slated to be spent on store cards in 2009, and another $4 billion on prepaid gift cards that can be used anywhere. What consumers don’t know, however, is that there are rules associated with prepaid gift cards that can have an impact on the value of those cards. Prepaid gift cards can seem like a great gift, since they can be used for anything, including necessities in these tough economic times.
Unfortunately, unlike most store cards, prepaid gift cards can charge fees. Most prepaid gift cards cost money to purchase the card itself. If the card is inactive or remains dormant, a dormancy fee can be charged. If the card is not used within a given period of time, additional fees may be incurred.
The CFA and the National Association of Consumer Agency Administrators (NACAA) are trying to educate these unknowing consumers about these features of the prepaid gift cards, so consumers can make wise buying decisions on gift card purchase and use. The organizations will be putting out a brochure which advises consumers to be aware of all fees and expiration dates when purchasing a pre-paid gift card. A copy of this educational brochure can be found at this website