The trouble with gift cards

They're a great last-minute Christmas present, but gift cards can be a waste of money.
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03.Gift card traps

  • Expiry date Will the card be honoured after its expiry date? There are only a handful of cards that do not expire. However, some stores may exchange expired cards for new ones or honour them even after they’ve expired. A large number of card providers allow a grace period (usually one month) after the card has expired. Be especially wary of cards that state only their issue date rather than the expiry date (they usually also state the time period for expiry after the issue date). 
  • Balance You should be able to easily check the remaining value on the gift card. While most allow you to do so via a website or dedicated customer phone number, some require you to check the balance in-store. Visa and MasterCard gift cards may charge you a fee if you ring customer service to check your balance.
  • Not honoured for transactions less than a specified amount Some cards cannot be used for amounts less than $5 or $10 - so if the limit's $10 and you have $9.50 left on your card, then your only option is to buy something more expensive and pay the excess. 
  • Lost or stolen cards You normally have to treat your gift card like cash – if you lose it, it’s gone. However, some retailers allow you to cancel and re-issue a card you’ve bought, sometimes for a fee. Conditions apply, so hold onto your receipts for gift cards and jot down details such as the card number.
  • Restrictions about which shops accept the card You can usually only use a gift card in a specific store or group of stores, such as the Coles Group & Myer gift card and Woolworths Wish card. Shopping centre cards can be used in a wider variety of stores, but note that they may not be accepted by all stores in the shopping centre.
  • Will you get change? For most cards, the answer is no, but you can use the card again for later purchases if you haven’t used the full amount. 
  • Fees and charges Fees are mainly a problem with Visa and MasterCard gift cards. Most retailer cards have no fees, but some cards charge an issue fee, or a fee if you want to extend the expiry period.

Beware Visa and MasterCard fees

Visa and MasterCard gift cards are available from your bank, retail stores or online. They can be used at most retailers or businesses that accept Visa or MasterCard, so they’re valid at many more places than other gift cards. But the downside is the fees.

  • There is usually a purchase fee ($4.95, for example).
  • There may be fees of up to $4.50 for checking the card’s balance over the phone (though it may be less expensive or free online, or automated phone services may be available). 
  • These gift cards usually expire after 12 months and any remaining balance is lost. Some cards allow you to reload them and don’t expire. However, read the fine print carefully, as reload and monthly fees can apply, as can a transaction fee every time you use the card. 
  • The retailer may also charge you a surcharge for using a Visa or MasterCard.

They usually must be treated like cash, although a few cards can be replaced if lost or stolen, so check carefully. 

Converting unwanted gift cards to cash

A new website, Cardlimbo, allows you to sell unwanted gift cards and buy second-hand cards discounted by up to 20% or more.


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