Why it is hard to get all the value from your gift card

If you have ever had a gift card, like most people, you probably did not use it up completely. In fact, of the almost $ 90 billion in gift cards sold in 2007, a full 10% of the value of gift cards went unredeemed.

Why is this? You probably lost it, forgot to take it along, couldn't determine how much it had left, or just figured it had so little left on it, it wasn't worth the hassle. You threw it away.

What happened wasn't accidental. The gift card industry has intentionally made it very hard for you to get the full value from your gift card.

How is this possible? Most state laws allow companies that issue gift card to keep a substantial portion of gift card balances that are never used. Clearly it is in the industry's favor to make it hard for you to completely use up your gift card.

Some states are starting to pass laws that make it easier for you to use your gift card up completely. For instance, in 2008, a California law took effect that allows you to get cash for a remaining gift card balance of under $10. Unfortunately, this only applies to store-specific gift card, such as from Target, Home Depot, or Starbucks. If your gift card is a Visa, MasterCard, American Express, or Discover gift card, so called open-loop cards, there is still no help.

To help fund budget shortfalls, many states are beginning to claim unclaimed gift card balance as their own under abandoned property laws. You probably can't expect much legal help if you live in one of those states.

Open-loop gift cards are even harder than store-specific gift cards to completely use up:

• Most retailers will not accept an open-loop gift card along with another form of payment, making it nearly impossible to use a card with less than ten dollars left on it.
• With a store-specific gift card, the retailer can tell exactly how much is left on the card. With open-loop cards, retailers have no way of knowing how much is on your card. So, even if they are willing to accept the card with another form of payment, you have to tell them how much to charge on your gift card. If your eyes are good enough to read the 3-point type on the back of your gift card, you can find the website address or phone number to check remaining balance on your gift card, and then carry it around on a post-it note in your wallet.
• Open-loop gift cards are a nightmare to use for online purchases. Some retailers will accept them, and some won't. Often, you need to register the gift card before you can use it.
• Gift card support websites are among some of the worst on the net and some don't support alternative browsers.
• Most cards start charging steep fees after 12 months. These fees will quickly drain the remaining value from your card.
• Sometimes cards simply stop working before they are supposed to. You purchase a card, use it once, and all of a sudden it stops working. There is often no customer service to help you solve your problem. For example, one gift card issuer has a support number with only a voice recording and a website with an email address that is invalid.

Despite problems like these, gift cards are convenient, useful, and often offer a form of privacy that is not available elsewhere. We started this service to help level the playing field for gift-card users.