Things to consider when purchasing and using gift cards: Part 1

Be a wise consumer when purchasing gift cards.

Purchasing gifts for others can be a difficult task. Shopping takes time and sometimes it is hard to know what the perfect gift is for every person on your list. Gift cards can be a wonderful solution to the gift-giving challenge. Gift cards are fast, convenient and can even help with shopping on a budget since many come in specific monetary increments. However, not all gift cards are the same. The Federal Trade Commission (FTC), which is the nation’s consumer protection agency, encourages consumers to understand the differences between gift card types and offers suggestions on purchasing and using gift cards which will be covered in Part 2.

The two main types of gift cards are retail gift cards and bank gift cards. Retail gift cards are sold by specific retailers and can only be used with those retailers (i.e. chain stores, restaurants, etc.). Bank gift cards carry payment card logos and can be used anywhere where those logos are accepted (i.e. Discover, Master Card, Visa, etc.).

When purchasing gift cards the FTC recommends the following:

The next article in this series will highlight suggestions on using gift cards and how to report problems with gift cards. For additional financial resources, visit MI Money Health, part of Michigan State University Extension.