Target’s 'hidden' return policy

If you try returning something to Target without a receipt, there’s the retailer’s posted 90-day return policy and then there’s its unwritten return policy.

According to the posted policy, you’re simply out of luck if you don’t have a receipt and Target can’t verify the purchase through its electronic “receipt look-up” system, as might be the case if you paid cash or received the item as a gift.

But for items costing up to $20, there’s another “hidden” option that you won’t see on the store’s posted return policy. Customers can get store credit, provided they show a driver’s license or other government-issued identification and haven’t already used this option twice during the year. This option actually has been around awhile, although it initially allowed no-receipt returns for items valued up to $100, an amount subsequently reduced to $40, and reduced again last year to $20.
   
“It is something we look at as an accommodation above and beyond the policy," says Target spokesman David Fransen. "It’s not publicized or advertised.”

We wonder why Target simply doesn’t tell shoppers this. Even better, we wonder why it doesn’t adopt the no-hassle policy of its largest competitor, Wal-Mart. Customers who return products to Wal-Mart without a receipt can get a store credit, even for high-priced purchases. And for purchases of less than $25, customers have the option of taking cash. As with Target, Wal-Mart’s return policy is 90 days for most products, although it’s shorter for computers, digital cameras and camcorders, and some other items. What’s more, Wal-Mart recently loosened its return policy for holiday gifts that fall under the shorter return policy. The return period starts on Dec. 26, even if the gift was purchased as early as Nov. 15.

But even Wal-Mart has its limits. If you return more than three items without a receipt within 45 days, transactions will need to be approved by a manager, and your account will be flagged for the next six months. The flag will disappear if there are no more returns during that time period.—Anthony Giorgianni

When cyber crooks have your number

The latest data breach involving consumers’ credit- and debit-card numbers has hit the Hannaford Brothers supermarket chain, which operates primarily in New England, and the related Sweetbay supermarkets in Florida.

The company says cyber crooks made off with customers’ card numbers and expiration dates but not their names or addresses.  It offered this advice to anyone who might be affected.

For tips from Consumer Reports on preventing such thefts in the first place and dealing with one if it happens, click here.
 

Beware of bogus car warranty pitches

Law enforcement officials throughout the country are warning of misleading solicitations aimed at pressuring car owners to buy extended warranties.

Missouri Attorney General Jay Nixon recently announced that he had filed lawsuits or reached settlements with numerous companies that he said misled and pressured scores of car owners across the country into buying extended warranties that, in most cases, they didn't need. In some instances, consumers were charged thousands of dollars.

He said the companies, most based in St. Louis, used official-looking postcards that included words such as “Notice of Interruption!” or “Important Dated Material Enclosed” to mislead vehicle owners into thinking that the mailing was from the vehicle manufacturer or dealer that sold them the car. He said one elderly consumer paid nearly $1,900 to buy a warranty after being told that her existing coverage “expired or was about to expire” in March 2007; the actual expiration date was November 2008. He said the company then refused the customer’s request for a refund.

“Many consumers—confused, but not wanting their car warranties to expire—went ahead and purchased the new, but in most cases unneeded, service contract the company was hawking,” Nixon said, in a news release.

A warning on the Washington State attorney general’s office Web site said that attorneys general around the country have been receiving increasing numbers of complaints about the practice. It said many of the postcards are personalized with the car owner’s name and a customer ID number. On such postcard, which appears on the Web site, was labeled in large, capital letters: “FINAL WARRANTY NOTICE.”

The Connecticut attorney general’s Web site reports that 20 states are investigating such solicitations, which it said also come in the form of letters, e-mail messages, and telephone calls.

Even when extended warranties are being sold honestly, they often aren’t worth the added expense, especially if your car has a top-reliability score. On the other hand, if your heart is set on a model with below-average reliability, deciding on whether to buy an extended warranty —also known as an extended service contract—is more of a toss-up. —Anthony Giorgianni

30 years without a credit card, part 2

Last week I wrote a blog item that set off a surprisingly spirited discussion here and on Web sites such as The Consumerist.

In it I mentioned that I’ve gone three decades without a credit card—at least the kind that extends revolving credit. As I noted in the blog, I do have an American Express card, which has to be paid off in full each month.

Some of the readers who posted comments had favorable things to say; others thought I was splitting plastic hairs in saying the card I do carry isn’t technically a credit card. The words “smug” and “self-satisfied” even came up a time or two.

Quite a few commenters protested that anyone with the proper discipline could use a credit card without incurring onerous fees or paying outrageous interest.

I don’t disagree. I would point out, however, that lots of people do get in trouble with their credit cards, and there’s reason for concern that the situation is becoming worse. Here’s one recent study to that effect.

What may be most remarkable in all of this is how central credit cards have become to our lives. How did so many of us become so comfortable taking out a loan, in effect, every time we buy a burrito or a bottle of shampoo?

And whether or not we pay any interest on that loan, businesses are presumably adding something to the cost of their wares to cover the fees the card companies impose on them.

The genius of the credit-card companies is that they have managed to insert themselves into not just the big transactions where people might not have enough cash in their wallets but into the smallest, most everyday ones. This part is equally true for the card I carry, of course.

You’ve got to hand it to them, I suppose. But you don’t have to hand it to them with interest.

Comments, anyone?

—Greg Daugherty

Greg writes the “Retirement Guy” column in the Consumer Reports Money Adviser newsletter.

Bring out your inner skinflint

Money is tight these days, and most of us appreciate whatever advice we can get on saving. Our resident penny pincher, Anthony Giorgianni, shares one of his recent money-saving moves.

I recently decided to upgrade to the expanded-function “pro” version of one my favorite freeware computer programs, RoboForm, a handy and high-rated password manager and Web form filler. Just as I was about to pay $29.95 at the “checkout,” the wise shopper (make that “skinflint”) in me took over. In a new browser window, I Googled “Roboform coupon.” Right near the top of my search results was an online coupon for 20 percent off. I pasted the coupon code into the checkout page and got an instant $6 savings.

The lesson? Don’t even think of shopping online (and maybe elsewhere) without searching thoroughly for an online discount coupon. You’ll likely find that a simple Web search works best, though here are just a few of the many Web sites that offer free coupons and coupon codes: couponchief.com, couponcabin.com, fatwallet.com, retailmenot.com, and ultimatecoupons.com. Who knows how much the skinflint in you can save?

Sharper Image demonstrates perils of gift cards

Holders of Sharper Image gift cards have been getting a hard lesson in some of the downsides of gift cards.

Some three weeks after the specialty retailer filed Chapter 11 bankruptcy on Feb. 19, owners of gift cards and merchandise certificates are facing confusing options about what to do with those obligations, which the retailer initially said it wouldn't honor, at least for the time being.

On March 7, the U.S. Bankruptcy Court for the District of Delaware granted the retailer’s request to resume honoring its cards and certificates—but only for customers who make a purchase of at least twice the value of the card or certificate. So to use up a $50 gift card, a customer would have to buy at least $100 in merchandise.

Initially, the San Francisco-based retailer specifically told the court that it was not seeking interim authority to redeem its estimated $42.6 million in outstanding cards and certificates, including those cards it sold to Discover and American Express for use in those companies’ membership rewards programs. But that was before Feb. 27, when competing retailer Brookstone took advantage of the situation by offering to give anyone who surrenders a Sharper Image gift card, merchandise certificate, or similar obligation a 25 percent discount off their entire purchase at any of Brookstone’s 314 stores nationwide. (Brookstone’s offer does not apply to Web site purchases or to Sony, Celestron, Bose, Panasonic and Tempur-Pedic products.)

In its March 3 motion to the court, Sharper Image wrote:  “Brookstone is only one of undoubtedly many Sharper Image competitors that will attempt to capitalize on the fact that Sharper Image is currently prohibited from honoring its gift certificate and merchandise certificate programs by instituting promotional programs designed to draw customers away from the Sharper Image.”

The case is just one more reason why holders of gift cards, merchandise certificates, store credits and similar obligations should use them as quickly as possible and think twice about purchasing them in the first place. Last December, Consumer Reports Money Adviser reported on the problems with gift cards, including the risk of issuer bankruptcy. With growing problems in the economy, other retailers might also go under, leaving consumers with worthless obligations.

“It is not a surprise to us that people are having problems using these cards once [the store goes] into bankruptcy. The general advice is spend them quick. That advice is even better right now,” said Evan Johnson, administrator the Montgomery County, Md., Office of Consumer Protection. Johnson conducts an annual survey of gift cards to determine the fees and other conditions that card issuers impose.

The case could end up testing relatively recent state laws in California and Washington that prohibit retailers from using bankruptcy as a reason not to honor gift cards and certificates. In those states, the value of those obligations is deemed to be held in trust for consumers and not the property of the company. California last week tried unsuccessfully to get a state court to intervene. Attorneys general in both states say they are studying whether to raise the issue in the bankruptcy court.

YOUR CHOICES
If you have Sharper Image gift cards and merchandise certificates, what should you do? Here are your options:

• Redeem the card or certificate at Sharper Image. You can use it only if you spend twice its value. While that may seem unfair, especially if you received the card as a gift, it could be your easiest and least-costly option. The offer might not be valid at the 90 Sharper Image stores that the company plans to close as part of its reorganization plan, about half its outlets. Also, if Sharper Image fails, it won’t be there to honor its return policies or any other rights you may have if a products turns out to be defective.

• Redeem the card or certificate at Brookstone. In this case, you’d receive a 25 percent discount on your entire order if you surrender a Sharper Image gift card, rewards card, gift certificate, or merchandise credit. You won’t get the entire amount of the card or other obligation unless your purchase equals at least four times its value. For example, someone who has $50 on a Sharper Image Gift card would need to purchase $200 in Brookstone merchandise to receive the card’s full benefit. On the other hand, if your purchase exceeds $200, you would end up saving more than the value of your card. Brookstone spokesman Robert Padgett said a Brookstone store in Atlanta sold Sharper Image card holders three $4,500 massage chairs, giving a 25 percent discount on each.

• File a challenge. If the Sharper Image gift card or certificate was purchased recently using a credit card, the credit cardholder can try challenging the purchase with the credit card issuer. But this might not work. For one thing, you might already be past the time limit on such claims. Also, the credit card company might not agree with your claim.

• Wait out the bankruptcy. This is probably the least attractive option. For this to work for you, Sharper Image must reorganize successfully and resume honoring its gift cards and merchandise certificates without conditions. In its court filings, the company reported that as of Jan. 31, it had $251.5 million in assets and $199 million in debt. If Sharper Image goes out of business, card and certificate holders will have to line up behind the secured creditors for a piece of the liquidated assets. Typically, consumer creditors receive pennies on the dollar, if anything.

If you choose to roll the dice with this option, send a proof of claim form to Sharper Image Corp. Claims Processing, c/o Kurtzman Carson Consultants LLC, 2335 Alaska Ave., El Segundo, Ca 90245 (tel.# 866-381-9100). Be sure to designate yours as a priority claim. To do this, check the box next to “Up to $2,425 of deposits toward purchase, lease or rental of property,or services for personal, family, or household use,” and enter the entire amount on the line labeled  “Amount entitled to priority." This may place you ahead in the line of unsecured creditors.— Anthony Giorgianni

Debit users say the PIN is mightier

Further evidence that consumers are pretty smart comes from a new survey by the research firm Gartner. It found that most debit-card users would rather punch in a PIN to make a supermarket purchase than sign a payment receipt. This is despite the push many banks have made to get consumers to sign (which rewards the bank with higher transaction fees).

But signing puts you at greater risk of identity theft and, under federal law, your liability for fraudulent charges on a debit card can be greater than for a credit card. This recent article from the Consumer Reports Money Adviser newsletter offers tips on how to avoid high overdraft fees and other bad stuff when using your debit card. 

Incidentally, the Gartner survey showed one payment method consumers preferred even over the debit/PIN combo. That was paying with cash.

Don’t trust a car dealer to pay off your loan

When trading in your old vehicle for a new one, you might be tempted to leave it to the dealer to pay off the existing loan, either by using part of the old car’s trade-in value or rolling any unpaid balance into your new-car loan. While that arrangement might sound convenient, it carries risks, as many Californians recently learned.

There’s a chance that the dealership may go out of business before paying off the note, leaving you on the hook for the remaining loan balance on your old car, along with the loan on the new car. The problem has become widespread in California, where hundreds of consumers have lost millions of dollars. The state is setting up a fund to reimburse victims.

Another danger is that the dealer might delay paying off the loan, causing your credit report to show missed monthly payments. That can damage your credit score, forcing you to pay more for future loans and insurance.

Consumers for Auto Reliability and Safety, a public-interest group in Sacramento, Calif., advises car buyers to pay off any outstanding loan on their old vehicle before trading it in for a new one. The group notes that doing so may be difficult, especially if the money you need to pay off the loan is tied up in the value of the trade-in. “It could be inconvenient, but how else are you going to know you’re protected?” asks Rosemary Shahan, the organization’s president. “How do you know the dealer is going to pay off the loan and not go out of business?”

If you can’t pay off the loan, you might want to wait until your payments are finished before shopping for a new car. That’s an especially good idea if you’re “upside down” on the loan and owe more money than the vehicle is worth. If you trade in a car under those circumstances, a dealership will typically add the balance of the outstanding loan to the new-car loan, leaving you essentially paying off two loans at the same time.

Similarly, whether you’re buying a used car from a dealership or an individual, make sure that any previous loan has been satisfied. If it hasn’t and the former owner falls behind, the lien holder might threaten to repossess the car. You can tell there’s been a loan if a lien holder’s name is on the front of the title certificate. If there is one, ask for proof that the lien has been paid. The lender should give you a lien release.  —Anthony Giorgianni

The scoop on ticket scalping

Ticket scalping has been around since the 1850s, and legal attempts to stamp out the practice were as futile back then as they are today. But now scalping has become bigger than ever, a booming multibillion-dollar business, thanks to lawmakers who say if you can’t beat ‘em, join ‘em.

The explosion of Internet ticket sales has made it almost impossible for authorities to enforce price caps limiting a seller’s markup over face value. In recent years, all but a handful of states have eased or eliminated restrictions on scalping, making it perfectly legal to charge whatever the market will bear for tickets to hit shows, concerts, and sporting events.

While you’ll still find individual ticket sellers working the crowd outside of stadiums, arenas, and theaters, modern-day scalpers are big Internet-based companies like StubHub, TicketsNow, and RazorGator that prefer to be called brokers or resellers. They’re regulated, tax-paying entities, and have gained added credibility by inking deals with major sports leagues be the “official” ticket resellers.

Proponents see only an upside to scalping moving out of the shadows. They contend that, regulated brokers, are safer, more reliable, and offer greater protections to consumers, while creating a fair, open market for tickets to marquee events.

Critics paint a different picture, suggesting it’s a system that favors the wealthy, putting even more events out of the reach of Joe Fan. Speculators motivated by greed, they argue, buy up season tickets and everything else they can get their hands on, strictly for resale, thus preventing real fans from having a fair chance to see their favorite performers.

What do you think? We at Consumer Reports would like to hear about your experiences—good or bad—with ticket resellers. Were you pleased or dissatisfied, did you encounter any unexpected problems, tricks or traps, and were you able to happily resolve any disputes? Your comments and advice might help other consumers avoid making mistakes in the future, and contribute to a story that we’re working on about the subject. So this is your chance to sound off. —Tod Marks

Your cost of living may be rising faster than the Consumer Price Index

Inflation as measured by the Consumer Price Index rose 4.1 percent from December 2006 through December 2007 (the latest figures available). But a closer look at the individual spending categories that comprise that headline-making index reveals that in some everyday spending categories, consumers definitely are being hit much harder than the overall rise in the CPI would suggest.

Not surprisingly, energy-related costs rose most steeply over the past year. Gasoline was up 29.6 percent; heating oil rose 28.3 percent; and the rate of increase for public transportation was 7.2 percent, or close to double the CPI rate.

And if it seems like you’re paying more and more for food, you’re right. Grocery prices are up 5.6 percent overall, led by 13.4 percent increase in dairy products, with the price per gallon for milk sometimes vying with the tab for a gallon of gas. Prices rose nearly 6 percent for fruits and vegetables, with increases in the range of 5 percent for cereal, meat, poultry, fish, and eggs. Both gasoline and groceries are the categories that are omitted from the “core inflation rate” that is often the focus of the Federal Reserve when it sets interest rate policy, even though they are a vital component of consumers' weekly budgets.

Drowning your sorrows about rising prices would have been a bargain by comparison—the 3.8 percent rise in alcohol prices actually was less than the total CPI increase. There were a few categories, such as apparel and furniture, for which prices dropped slightly, and there was also one product area that delivered tremendous bang for your buck: Personal computer prices actually declined by 13.2 percent over the past year.  —Andrea Rock

Health gift-card fees can make you sick

Adding a new twist to the growing gift-card industry, the Healthcare Visa Gift Card from Pennsylvania-based insurer Highmark is designed to be used exclusively for health-care products and services. But as gift cards go, this new one is much like the old ones, with enough fees and restrictions to give you indigestion.

Though the health-care gift card is billed as "a unique way to let loved ones know just how much you care," it’s little more than a bank-issued gift card with all the typical ailments. Want to buy one? That’ll cost you $4.95, plus a minimum $1.25 shipping fee. Lose it? Pay $4.95 for a replacement. Want to close out the account and take the balance? That’s another $6.95. Still have a balance after eight months? A monthly $1.50 fee will be deducted from what’s left.

So what do you get for all this? Not much. Unlike other bank-issued Visa gift cards, which are valid at most merchants that accept Visa, the Highmark card is supposed to be used only for health-related purposes, such as doctor and hospital visits, dental work, eyeglasses, medications, ambulance services, health spas, and so on. It can be loaded with as little as $25 or as much as $5,000.

It sounds good in theory, but there’s a big problem. The Visa electronic payment system isn’t capable of limiting the individual products purchased with a card, at least not yet. So Highmark does the next best thing: It limits card usage to businesses that typically market health-care services and products. But falling into that category are discount stores such as Target and Wal-Mart, supermarkets, and wholesale clubs (not to mention the candy aisle of your local pharmacy). That means your elderly aunt can use the card to support her cigarette habit, satisfy her sweet tooth, or buy just about anything else her heart (as unhealthy as it may be) desires.

What to do. If you would like to help a loved one pay for health care, there are better ways to do it than buying a gift card. You can simply write a check to his or her doctor for the next visit or pick up the cost of a prescription.

If you really prefer to give a gift card, consider one from a health-care retailer, such as a pharmacy. While you won’t prevent recipients from using the card to buy soda and Cheez Doodles, you will avoid saddling them with a bunch of fees and other annoyances common to the Healthcare Visa Gift Card and other bank-issued cards. —Anthony Giorgianni

Supersize your restaurant savings

Here’s a tip to save both money and calories: Buy the big size and split it. “With the mega-sizing of restaurant meals, sharing is the best way to save money and improve your health at the same time,” says Dayle Hayes, a registered dietitian in Billings, Mont.

For example, at one major fast-food chain, splitting a large order of fries instead of buying two medium-sized ones will save you and your lunch mate 190 calories (90 of them from fat) and about $1.59. And that’s just the fries.

Do you have some money-saving tips to share? Post them here by clicking on “Comments.”

With wines, does price = pleasure?

Researchers at the California Institute of Technology and Stanford University published a recent study showing that people were more likely to prefer a wine they thought was expensive, versus the same wine labeled at a lower price. Even their brains reacted differently; they registered more activity in an area of the brain related to pleasure when they thought they were drinking a $90 bottle of wine than when they drank the same stuff labeled at $10.

But here's the kicker: When they didn't know the price of the wines, they preferred the least-expensive one.

Keep that in mind when you're shopping for wines. Don't automatically equate high price with high quality. It's true that many pricier wines are superb, and that the world's very best wines never cost $5 or $10. But in Consumer Reports blind wine tests, in which our expert testers know neither the label nor the price, some relatively inexpensive wines earn the highest Ratings. Conversely, some $20 or even $30 wines garner mediocre scores.

For Ratings of 10 varietals, most at $20 a bottle or less, check our Wine hub.

--Tobie Stanger

R.I.P. for the check?

For all the talk over the years about a cashless society, it’s looking like a check-less one could happen first. According to a Federal Reserve study released this month, more than two-thirds of noncash payments are now done electronically, primarily by debit and credit cards, and less than a third are made by check. Just four years ago, in 2003, the split was roughly 50-50.

Since 2003, in fact, the use of checks has declined by about 6.4 percent a year, the Fed says.

Debit and credit cards certainly are more convenient as a payment method than writing a check. To make sure that convenience doesn’t cost you, follow our readers' advice on selecting a consumer-friendly credit card. Also, when using a debit card, monitor your checking account to make sure you don’t overdraw your account and incur penalty fees.

Class action suit spurs refunds of currency exchange fees

If you used your credit, ATM, or debit card for foreign transactions, you could be eligible for a refund of some of the currency exchange fees you paid, according to the proposed settlement of a class-action lawsuit brought against Visa, MasterCard, Diners Club, seven major banks, and affiliated companies. But you must file your request by May 30.

Under the proposal, payments would be available to anyone who used a Visa-, MasterCard- or Diners Club-branded credit, charge or debit/ATM to make foreign transactions while traveling abroad or over the Internet from Feb. 1, 1996 to Nov. 8, 2006. Covered transactions include purchases, cash advances, and cash withdrawals.

The refunds are expected to be at least $25, though they could be higher for individuals and corporations who actually can provide good estimates of their foreign transactions.

The proposal would settle charges that the card companies, their member banks, and affiliated firms conspired to set and conceal the markups and fees on currency exchange rates, typically 1 to 3 percent of foreign transactions. The class action suit also alleges that the companies failed to disclosure the fees adequately.

In agreeing to settle the case, the defendants denied wrongdoing, saying that the rates had been properly established and disclosed. They said they were agreeing to settle the case to “avoid the inconvenience, expense and uncertainty of litigation,” according to the notice posted on the settlement Web site.

The other defendants include Bank of America, Bank One/First USA, Chase, Citibank, HSBC/Household, MBNA and Washington Mutual/Providian, as well as certain affiliated and predecessor companies.

Under the proposal, the defendants would pay $336 million to pay claims, attorneys' fees and expenses. The proposal also would require them to make certain disclosures to cardholders about the rates used to calculate the U.S. dollar amount owed for a foreign transaction and any fees applied in connection with a foreign transaction. The proposal received preliminarily approval the U.S. District Court for the Southern District of New York on Nov. 8, 2006. A hearing on final approval has been set for March 31.

To participate, you must file a claim form by May 30. The claim form allows participants to opt for one of three types of refunds:
• Easy refund of $25. This option is recommended for those who traveled outside the U.S. for less than one week or had foreign transactions of less than $2,500 using the affected cards.
• A refund of up to 1 percent of estimated transactions. Based on typical spending during foreign travel and your answers to a few questions, this is recommended for those who traveled outside the U.S. for more than one week or had foreign transactions of more than $2,500.
• A refund of up to 1 to 3 percent of annual estimated foreign transactions. This option is recommended for those who had extensive foreign transactions and who can provide year-by-year information.

Any amounts, including the $25 easy refund, could be lower if participation exceeds expected levels.

Affected card holders also can object to or opt out of the proposed settlement by Feb. 14. Those who do not opt out would be covered automatically by the settlement terms, including giving up their right to pursue further claims against the companies.

For further information or to obtain a claim form visit the settlement Web site or call 1-800-945-9890.—Anthony Giorgianni

Give the gift of micro loans

Looking for a holiday gift that will really keep on giving? How about turning a loved one into a humanitarian financier by giving them a Kiva.org gift certificate?

Recipients redeem their certificates to make “micro loans” directly to small entrepreneurs in 37 developing countries. Once the loan is repaid, the lenders can re-lend or withdraw the money, ultimately using it for that MP3 player or anything else they want.

It’s all done through the San Francisco non-profit group’s Web site, which features a profile of every entrepreneur seeking to raise him- or herself out of poverty.

Take for example Jorge Romero, who recently requested a 6-month, $650 loan to buy shampoo, conditioner, and other supplies for his beauty salon in Paraguay. Or Betha Auma of Kenya, a wife and mother of six seeking an 18-month, $800 loan to buy 20 sacks of grain to sell in her cereal business. Or Sun Channy of Cambodia, asking for $1,200 over 18 months to buy more ducks for her retail egg business.

Generous Kiva lenders quickly granted those three loan requests. In fact, due to huge media attention the organization has received from the Oprah Winfrey Show, PBS’s Frontline/World, and even former President Bill Clinton, the average wait for a Kiva loan is an incredibly short 1.5 days. The most popular entrepreneurs are African women, whose loan requests are filled almost immediately after being posted on the site, says Kiva spokeswoman Krista Van Lewen.

Recipients redeem their $25 to $5,000 Kiva gift certificates to set up a lending account. They then decide when to make a loan, in what amount and to whom.

Although account holders can lend the entire amount to a single entrepreneur, they most often divide the money among more than one borrower. Usually, each loan is made up of money pooled from numerous lenders, with each lender kicking in, on average, $25, the minimum loan amount. Kiva lenders typically have a total of $100 in their accounts or on loan at any one time. Lenders can track the entrepreneur’s progress through updates posted on the Web site or sent by e-mail.

Once the entrepreneurs repay their loans, the money is returned to the lenders’ accounts, where it can be lent again, donated to Kiva itself or withdrawn, all without fees.

Lenders don’t earn interest, and there’s even a small chance that they could lose part or even the entire amount they lend. But, of the more than $2 million in loans completed since Kiva was founded in 2005, only about a quarter of 1 percent are in default. Outstanding loans currently total more than $13 million. Because lenders expect to get their money back, Kiva loans are not tax-deductible. However, lenders may be able to take a capital loss deduction for any money they lose through default.

To purchase gift certificates, you must first create a Kiva account. The certificates are purchased through the Web site using PayPal, which accepts major credit cards. PayPal waives its transaction fees for Kiva members. The certificates can be sent directly by e-mail or printed. They must be redeemed within a year, or the proceeds will convert to a donation for Kiva’s operating expenses. The company will e-mail two warnings before that happens. Certificate givers can use the Web site find out if a certificate has been redeemed. —Anthony Giorgianni

Ways to cut the cost of shipping

Americans are expected to spend almost $475 billion this holiday season. And that doesn’t include the costs of sending gifts to relatives or paying a premium so they arrive in time for your own family. Here are four suggestions to trim shipping expenses.

Get ahead of the rush. Nearly a quarter of shoppers surveyed in 2006 said they waited until the last minute. But you’ll save big on shipping if you mail early. For the biggest savings at the post office, mail by Dec. 15—the deadline for items sent by Parcel Post to be delivered in time for Christmas. The deadline extends to Dec. 20 for First Class, Dec. 20 for Priority, and Dec. 22 for Express Mail. But those extra days come at a cost. A 10-pound package sent from New York to California runs about $45 if mailed Express vs. $16 for Parcel Post. A Priority Mail Flat Rate Box is a great value: For $8.95 you can send a package anywhere in the U.S. as long as it fits within one of two designated boxes and weighs no more than 70 pounds. FedEx Ground will deliver packages by Dec. 25 if shipped by Dec. 17, and the deadline for FedEx Express is Dec. 19. But those extra two days will add $25 to the cost of shipping a 10-pound package. 

Consider in-store pickup. Shoppers can avoid shipping costs with retailers who offer local in-store pickup for online orders. Wal-Mart says its Site to Store program has saved customers $10 million in shipping costs since the program was launched this spring. Site-to-store orders arrive 7 to 10 days after order processing, which can take 48 hours by itself. Other retailers that offer in-store pickup include Best Buy, Circuit City, and Sears. Merchandise is often available the same day, but you may have to travel to a particular store to get it.

Look online for coupons. Free shipping may be just an Internet search away. We entered "shipping coupon" into Google and found offers for free shipping at Target, JCPenney, Timberland, and the Gap. Popular coupon Web sites are Judy’s Book and Shopping Bargains.

Watch for promotions. L.L.Bean is offering free shipping on all holiday orders this year. And some online retailers will ship orders of a certain size for free. Amazon.com, for instance, ships qualifying orders of more than $25 for free, though delivery takes an additional 3 to 5 business days. —Gregory Brown

Consumer agency offers guidance on gift cards

When buying gift cards for the holidays, you might want to stick to retailer-issued cards, which remain relatively free of the expiration dates and pesky fees common to the bank-issued variety. In its fifth annual gift card survey, the Montgomery County, Md. Office of Consumer Affairs recommended 18 of the 22 retailer gift cards it reviewed from late October to November.

But the agency said all of the 30 bank-issued cards it examined continue to have purchase and processing fees, expiration dates and other gotchas, some of which were not properly detailed despite disclosure-related lawsuits brought by the Federal Trade Commission and 2006 guidance issued by the federal Office of the Comptroller of the Currency.

The report’s criticism of gift cards, particularly those issued by banks, mirrors many of the problems Consumer Reports Money Adviser identified in its recent gift card report, published earlier this month. Bank-issued cards bear a major credit logo and, unlike retailer cards, can be used at most merchants that accept that brand of credit card.

RETAIL STANDOUTS
The Montgomery County report recommended 18 standout retail gift cards because they lack fees and expiration dates; are replaceable if lost or stolen; can be used to make purchases from the retailers’ Web site in addition to its walk-in stores; and have a scratch-off personal identification number, a security feature that may help prevent unauthorized purchases. The 18 cards are issued by Abercrombie & Fitch, Best Buy, Blockbuster, Circuit City, Crate & Barrel, Gap, JCPenney, KB Toys, Kohl’s, Lowe’s, Nordstrom, Old Navy, Pet Smart, Sears, Sports Authority, Starbucks, Target, and Wal-Mart.

The four retail cards that weren’t recommended are the Macy’s and Bloomingdale’s cards, which expire two years after the cardholder last adds value; the Shell gas card, which imposes a $1.75 a month “dormancy” period after 12 months of non-use; and the card from Claire’s fashion accessories store. The Claire’s gift card’s $1 per month dormancy fee, which kicks in after two years of inactivity, is applied retroactively to the first month. The fee is not disclosed when the Claire's card is ordered on the retailer’s Web site, the survey reported.

FEES AND EXPIRATION DATES
The survey found many of the same fees and other limitations that have typified bank-issued cards for years:

• Purchase and processing fees. These ranged from $2 to $10.90.
• Maintenance fees.  Monthly maintenance fees ranged from $1.25 to $4.95, kicking in after six months to a year, depending on the card. The iCARD Visa Gift card imposes a $25 fee after the first six months and every six months thereafter.
• Expiration dates. These were from 6 months to 42 months. After the expiration date, card holders usually can get the card reissued or request a refund, though nearly all of the cards impose a charge, ranging from $5 to $25, for doing so. Moreover, many of the cards continue to charge monthly maintenance fees even during periods when the card is expired.
• Replacement fee. These ranged from $5 to $15.

MISSING DISCLOSURES.
The survey identified seven bank cards that failed to properly inform purchasers about fees and other restrictions. For example, the Vanilla Visa Gift Card packaging says nothing about its maintenance fee. And the AAA and iCard Visa Gift Cards have no maintenance fee disclosure on the cards themselves, flying in the face of the OCC guidance. Both the U.S. Bank Visa Gift card and the giftcertificates.com MasterCard Gift Card Web sites say their cards expire, but neither reveals how long the card holder has before that happens.—Anthony Giorgianni

Use credit and debit cards wisely this holiday season

Have you started your holiday shopping yet? If you haven’t, you’re not alone. According to a recent Consumer Reports Holiday Shopping Poll, only 22 percent of consumers anticipate finishing holiday shopping right after Thanksgiving, compared to 30 percent in 2006. Forty-five percent of respondents said they do not anticipate finishing their shopping until the second week of December, and 20 percent said they would be pushing it right to December 24th. And approximately 6 percent of respondents are resigned not to complete their shopping until after the holidays.

Nearly one-quarter (23 percent) of our survey’s respondents said they expect to spend less this year than in 2006. If you want to control your spending, consider making a budget before you begin to shop. In our survey, among the 33 percent of consumers who made a budget for last year, 43 percent managed to stay on budget, with only 8 percent going way over budget.

Don't let finance charges and other fees push you over your budget. To keep from spending more than you have to, use the payment method that makes the most sense for you. If you pay off your credit card balance in full each month, charging your holiday gifts won’t cost you anything in finance costs and may even provide a bonus in the form of a cash-back or other type of reward. If you’d rather spend only what you have on hand but don’t wish to carry large amounts of cash, use a debit card. But be aware that if your bank account balance is inadequate to cover your purchase, you can be hit with large overdraft fees. Click here for more on how to decide the best method of payment.

Avoid debit card traps

There are two ways to use a debit card—entering a personal ID number or signing a sales slip like when using a credit card. Which way should you go?

Your bank likes when you sign. That’s because it charges merchants lots more to process signature-based transactions. But signing puts you at greater risk of identity theft and, under federal law, your liability for fraudulent charges on a debit card can be greater than for a credit card.

When you sign, the payment is processed through a credit-card network and the actual withdrawal from your account occurs later, usually within a couple of days. Some hotels, gas stations, and other retailers will put a hold on funds in your checking account during that time. The hold can be more than the amount of your purchase. If you’re running a low balance in your checking account, this can lead to multiple overdrafts—and penalty fees.

We suggest you forgo using a debit card all together for purchases such as rental cars and hotel bills and use a credit card instead. And if you pay off your credit card bill each month, consider using that card for most other purchases as well.  This way your cash will continue earning money in an interest-bearing account until the bill is due.

For more on how those convenient debit cards can hit you in your wallet, see “The Dark Secrets of Debit.” —Andrea Rock

Book bargains for traveling readers

In airport stores run by The Paradies Shops, you can buy a book, read it, and return it within six months to any store in the chain that sells books and get back 50 percent of the purchase price. The stores, which operate under such names as CNBC News, The New York Times Bookstore, and TravelMart, will accept a returned book no matter its condition as long as you have the original receipt. Find participating stores at www.theparadiesshops.com.

If you prefer audiobooks, you can buy tapes and CDs at Cracker Barrel Old Country Stores and return them when you’re finished to any Cracker Barrel for a refund of the price less $3.49 for each week you kept the item. Find store locations at www.crackerbarrel.com.—Caroline Mayer

Rebate gift cards are the worst of both worlds

As if having to deal with the eccentricities of rebates and gift cards wasn’t complicated enough, now there’s the rebate gift card. Instead of sending you a check when you apply for a rebate, some retailers and manufacturers are issuing gift cards for the rebate amount. They might be redeemable only for products or services from the issuing company. Some also carry expiration dates or activation fees, or lose value over time because of "dormancy fees." When buying something that includes a rebate, find out how it will be issued. If you’re given a choice, opt for a check. 

For more information, see "Rebates: Get what’s coming to you." —Anthony Giorgianni