When It Comes To Gift Cards, Holiday Returns BBB Advises: Let Buyer Beware

WALLINGFORD — As the holiday buying season is drawing to a close, many shoppers are selecting gift cards as presents. Connecticut Better Business Bureau, however, cautions consumers that it is essential to do their research before purchasing one.

Connecticut BBB President Paulette Scarpetti emphasizes that while gift cards are convenient, not all of them are created equal. “While the majority of vendors are honest, there is a degree of risk associated with buying gift cards from some online sites and over-the-counter displays at convenience stores and gas stations,” she said.

Since January 2011, Better Business Bureau has received more than 440 complaints against the gift card industry, a huge increase from the 33 complaints received in 2010. In some cases, consumers are disgruntled because they received an expired gift card that was loaded with cash, but was not usable until the expiration date was corrected.

After sending their expired cards for replacement, updated cards were never returned, leaving the recipients empty-handed. Connecticut’s Gift Card Law prohibits the sale of cards with expiration dates or inactivity fees.

BBB recommends the following tips for both gift card givers and recipients:

Know your rights. Federal rules that took effect in August 2010 are designed to protect consumers by restricting fees and changing conditions regarding gift card expiration dates. These new rules apply to two types of cards: retail gift cards, which can only be redeemed at retailers and restaurants that sell them, and bank gift cards, which carry the logo of a payment card network like American Express, Visa, or MasterCard and may be used wherever those brands are accepted. More information on the new rules is available from the Federal Reserve website at www.federalreserve.gov/consumerinfo/wyntk_giftcards.htm.

Check it out. Make sure you are buying from a known and trusted source. Always check out a business at www.bbb.org. Avoid online auction sites that promise “full value guaranteed” gift cards. Some sites of this type have been reported to sell cards that are valueless, counterfeit, expired, or obtained fraudulently.

Inspect the packaging and the card. Be on the lookout for gift cards that appear to have been removed from their packaging, approaching their expiration date, or already are expired. Verify that no protective stickers have been removed and that the protective layer on the back of the card has not been scratched off to reveal a PIN number. Report any damaged cards on display to the seller.

Read the fine print before buying. Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?

Provide the recipient with back up. Give the recipient the original receipt in case the card is later lost or stolen. Also, before you buy retail gift cards, consider the financial situation of the retailer or restaurant. A card from a business that files for bankruptcy or goes out of business may be worthless. If the business closes a store near the recipient, it may be hard to find another location where the card can be used. A business that files for bankruptcy may honor its gift cards, or a competitor may accept the card. In such a case, call the business or its competitor to find out if they are redeeming the cards, or will do so at a later date.

Treat the gift card like cash. For recipients, it is important to immediately report lost or stolen cards to the issuer. Some issuers may not replace them, while others will, for a fee. Make sure to use gift cards as soon as possible; it is not unusual to misplace or forget about them.

Learn Return Policies

Connecticut Better Business Bureau also recommends shoppers ask about gift return policies before pulling out the plastic to pay, as terms and conditions can vary widely from one retailer to another.

Store policies are usually displayed prominently at the entrance or cash registers and should be easily accessed on websites. These may deal with many issues including a time frame during which articles may be returned, who pays return shipping costs and whether there are “restocking fees.”

Some sellers may require as much as 25 percent of an item’s value if packaging is damaged and the item cannot be resold as new.

Connecticut BBB offers several tips to help gift givers and recipients avoid unpleasant surprises in the customer service line:

*Keep all paperwork and packaging: Most retailers insist on receipts for returned items. Help gift recipients by including a gift receipt or other proof of purchase.

*Not all items will be accepted for return: Find out in advance whether sale or clearance-priced gifts will be accepted. Such sales may be considered final and not covered by stores’ returns policies. For health reasons, certain items such as hats, swimwear, and other garments may not be eligible for return or exchange.

*Delivery dates are guaranteed by federal law: Consumers have the right to cancel a purchase and demand a refund if orders placed by mail, online, or by telephone are not shipped by the date promised. If no delivery date was specified, the item must be shipped within 30 days.

*Consumers also have the right to return gifts if the seller misrepresented the item, or shipped the wrong size or color, or sent items that were defective.

But beware.

As generous as one might be during the holiday season, companies are not required to accept returns or exchanges nor issue refunds or credits, so understand that refund and exchange policies can differ significantly from one seller to another.

While many major retailers have policies that will allow you to bring back any item at any time for any reason (or no reason at all), consumers should not assume all outlets will accept returns.

A store’s particular policy may only be applicable at that one location. Just because a major retailer has a liberal policy that allows recipients to obtain a store credit for an item that was opened, used, or perhaps not even purchased at that store, does not mean that all branches are obliged to do the same.

Consumers can find advice on staying safe online and in stores at www.bbb.org/us/consumer-tips-holiday/, in addition to reports on thousands of retailers at www.bbb.org.