Pick the right gift card for your holiday shopping

The Office of Consumer Affairs of Montgomery County, MD, just released its fifth annual gift card survey, and the results won't surprise anyone who has kept track of our reporting on gift cards. The agency recommended 18 of the 22 retailer gift cards it reviewed from late October to November.

But the Consumer Affairs office 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, mirror many of the problems we identified in our recent gift card report. 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.

>> More

What to do when giving or getting gift cards

We've kicked off the holiday season with our public education campaign about gift cards. Why gift cards? For one thing, unredeemed gift cards can be easy money for retailers and lost money for consumers. TowerGroup estimates that nearly $8 billion was lost last year due to unredeemed value, expiration or loss of gift cards.

“It’s easy to understand the appeal of gift cards. They’re the perfect no-muss, no-fuss gift for the finicky family member or friend. It’s a no-brainer,” says Tod Marks, a CR senior editor. “But gift-givers and recipients alike need to be aware of the pitfalls and make sure that precautions are taken so that the recipient gets the gift and not the retailers.” With that in mind, here are a few tips from the editors of the Consumer Reports Money Adviser newsletter:

IF YOU'RE GIVING A GIFT CARD:

• Think twice about bank cards. While bank cards generally can be used at more retailers than store cards, they're often loaded with fees and restrictions. If you must give a bank card, find one that doesn't charge maintenance fees until at least a year after the card is issued.
• Check the merchant's prices. It's annoying to get a $25 gift card for a store that sells little at that price. When selecting a store-issued card, find out how much things generally cost and get a card with at least that value.
• Send along the receipt. Some issuers require the original receipt to replace a lost, stolen, or damaged card.

>> More

Avoid gift card pitfalls

They’re convenient and popular, but gift cards are often loaded with fees, expiration dates, and other hassles

They seem like a perfect solution to the problem of what to give this holiday season. Gift cards are offered by banks, shopping malls, retailers, airlines, restaurants, hotels, Web sites, and even state parks. And you don't have to go far to find them—many supermarkets and drugstores display racks of gift cards conveniently near the checkout.

But a card is one gift that can keep on giving … grief. That's especially true for bank-issued cards, which often saddle recipients with fees, expiration dates, and other gotchas. Retail cards generally aren't as troublesome but some of them lose value or expire if you don't use them quickly, depending on laws and regulations in your state.

>> More