Plastic Perfection: Giving with Gift Cards

The idea of finding "the perfect gift" has always been an elusive one. While a trip to Hawaii or a fabulous car could make almost anyone brim with joy, few can afford such elaborate gifts, or even car-sized wrapping paper, for that matter.

It doesn't help that the shopping mall of today (the Internet) is practically limitless. With retail chains and antique auctions, a shopper can spend hours searching for that one prized possession. Before you wear out your feet and your fingers searching for a gift that might be great, consider something that is sure to hit the spot: a gift card.

Gift Cards, Defined

Gift cards look like credit cards, but instead of credit they have an assigned monetary value. Some gift cards are restricted for use at specific retailers, while others can be used anywhere credit cards are accepted.

Depending on the issuer, gift cards can be purchased online, inside the issuing store and in kiosks called "gift card malls" at supermarkets or drugstores. Gift cards must be activated by the retailer, at which point the value of the card, anywhere from $5-$500, will be determined. Once the initial value has been spent, some cards can be "reloaded" with additional funds.

Most Popular Gift Cards

The popularity of gift cards has shot up in recent years, right along with the number of ways to use them. A variety of gift cards (especially the most popular gift cards) can even be purchased at local grocery stores. Here are a few of the types of gift cards that are available to the savvy consumer:

• Charitable Gift Cards: Give the gift of philanthropy with an online charitable contribution gift card. The recipient chooses an organization, and then donates the value of their gift card to its cause.
• Combination Gift Cards: Gift cards that offer incentives along with monetary value give more bang for the electronic buck. These are often sold in special offers from retail or financial companies and generally have limits on where they can be redeemed.
• Experiential Gift Cards: State and National Parks, like Yosemite National Park in California, have begun selling gift cards online for those who prefer the gift of adventure. These cards can be used to pay for entrance, lodging and other park fees.
• Prepaid or Stored-Value Gift Cards: Similar to the Visa Gift Card, these are cards with a prepaid monetary value that can be used anywhere credit cards are accepted. They are typically purchased from major financial or credit card companies.
• Retail Gift Cards: These are sold by retailers in stores or online to be used with their merchandise. Such cards can be used for casual gifts or in celebration of holidays. For example, Borders, a retail bookstore, created African American gift cards in commemoration of Black History Month in 2008.

There's a gift card for just about every store or event imaginable. The most popular gift cards are sure to meet the needs of the average consumer.

Using Gift Cards

Recipients can use gift cards to purchase what they want, when they want it. They work for any gift-giving occasion, or as an incentive tool for employees or customers.

Some things to consider when purchasing and using gift cards:

• Fees and Penalties: Retail-issued gift cards don't charge any additional costs. Prepaid cards, however, almost always charge an initial fee. This can range from $2 to $12, depending on the issuer. Both types of cards will likely have an expiration date, at which point the value of the card is either lost or diminished.
• Personalization: Some gift cards can be personalized to make them unique. Images, embossing and even photographs can be incorporated into the card design. However, most retail-issued cards generally feature one standard design.
• Protection: Online registration is a feature that most all gift cards offer today. This enables the cardholder to check the balance on gift cards, replace lost or stolen cards and activate security features, as available.

Gift with Care: Abuses and Scams

In order to ensure complete satisfaction with your gift card, it is important to ensure that you've done all you can to safeguard it from fraudulent use.

Some of the most common sources of gift card fraud are online auction websites. Here, individuals can sell used or counterfeit gift cards, overstate the value of gift cards or sell stolen gift cards for cash. Gift cards bought from kiosks in general stores are also subject to fraud. Serial numbers or other information can be copied from cards that are not completely packaged.

In order to protect yourself from these and other gift card abuses, keep in mind the following:

• Always ask the retail staff to activate the card in front of you.
• Always carefully examine the gift card for evidence of damage or tampering.
• Always keep your proof of purchase and any related documentation.
• Avoid buying gift cards from public displays and kiosks.
• Avoid gift cards that have identification numbers printed where they can be easily seen.
• Check the balance on the gift card before you begin to spend.
• Don't buy gift cards from online sites.
• Never give your social security number, date of birth or any other personal information.
• Only buy gift cards in retail stores or from legitimate online retailers.
• Register your gift card with the issuer whenever available.

If you do a little research before you purchase, you can protect yourself from the abuses and scams that gift card recipients can fall prey to.