Merchant Gift Cards

From LoveToKnow Creditcards

Merchant gift cards can be a great way to allow recipients the option to pick their own gifts at their leisure. Purchasers should take care to buy cards that do not feature expiration dates and hefty fees to make sure the recipient can fully enjoy the gift.

Merchant Gift Cards Explained

Gift cards are quickly replacing the traditional gift certificate as the preferred means by which to gift a certain amount at a certain store. Most gift cards are the same size and shape of debit and credit cards, but instead of being linked to a revolving credit account they are linked to a balance that is deposited by the purchaser. Once the balance of the card is depleted, the card can no longer be used unless the balance is replenished. Whether or not the gift card is reloadable is up to the merchant selling the card.

Some gift cards come in specific denominations, such as:

  • $5
  • $25
  • $50
  • $100
  • $250
  • $500

While some merchants only sell gift cards in specific denominations, other merchants allow the purchasers to designate the amount of the gift as long as it falls within the merchant's minimum and maximum allowable amounts.

State Laws

States have taken steps to protect consumers from gift card practices that include quick expiration dates and hefty fees, and with good reason. Too often, recipients discovered that even though the merchant gift cards they received were for a certain amount, the balance was quickly depleted from fees or the card had expired altogether before they could fully use its value.

It is up to individual states to initiate and enforce gift card laws. These laws can potentially make gift cards more appealing to consumers than they once were. In some states, consumers don't have to worry that the gift cards they buy will expire or the balances will quickly dwindle due to fees. The good news is that many gift card issuers follow the standards of the strictest states – such as California – in order to make sure that their gift cards can be sold and used in any state.

Common Cards

During the holiday season, merchant gift cards become extremely popular purchases among gift givers. Gift cards are also purchased for other occasions including celebrations and as thank-you gestures. Some businesses purchase these cards in bulk (often at a discount) as a way to solicit new customers or to use as an employee incentive program.

Which merchants offer gift cards for use at their stores? The number of available cards is growing as they gain popularity. Cards are available from a wide variety of merchants:

  • Mass department stores: Stores like Target, Wal-Mart, and K-Mart all offer gift cards for use at their stores.
  • Grocery stores: Most major grocery store chains offer gift cards for purchase including Kroger Stores, Albertson's, and specialty grocers like Whole Foods.
  • Mall stores: Stores that commonly appear within the malls usually feature gift cards for purchases, including stores like Old Navy, Best Buy, and JC Penney.
  • Local specialty stores: Even local stores can issue gift cards, although some local merchants are reluctant to enter into this venture.

If you want to purchase a gift card for someone – and know what specific store the recipient prefers – it isn't difficult to discover whether or not the merchant offers gift cards. Look online at the merchant's website or call the company to find out if gift cards are available for purchase.

Cost

Unless you purchase gift cards online and have to pay a shipping and handling fee, there is usually no charge for purchasing a gift card. Merchants know these cards are fantastic for potential profit, so they try to make it as easy and appealing as possible to buy these cards.

You may want to think twice before purchasing a gift card if a merchant wants you to pay a fee for simply purchasing a gift card, and not just the balance you want to load on to the card.

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