I gave a retail gift card to my nephew last year. My well kept 19- year old nephew usually feels he is being financially starved no matter how much money he is given. So the worry of the gift card expiring or incurring large fees was not my concern, he rushed to the store to use it the next day. What is my concern is that many people who buy and receive gift cards, be it, retail cards or bank cards, do not understand the limitations posed by these cards. This is evident from the ever-increasing complaints to consumer bureaus.

Most people don’t understand that when you purchase a gift card they are not necessarily equal to the cash paid for them over time. This is especially true of bank or mall gift cards. Mall gift cards are bank gift cards sold by a shopping mall complex.

To understand gift cards you should understand the following:

1. There Are Different Types
As mentioned before there are two types; the retail (store gift card) and the bank gift card (also mall gift card). There are marked differences between the two. Retail cards are the least expensive as far as fees are concerned, bank cards offer the highest potential for decreasing value over time due to the fact that many have excessive fees.

2. How They Are Used
Retail cards can be used at the store you purchased them at, and sometimes a sister store. Bank cards can be used anywhere bank cards are accepted and sometimes at ATM machines.

3. How They Make Their Money
Retail stores make their money from the purchase you make with your gift card. With bank cards its a whole different story. The bank cards make their money from the extensive fees charged for purchasing, owning, and using the card.

4. Fees Charged Can Be Hefty
Some retail gift cards charge a monthly non-use fee and will not replace lost or stolen cards, and may expire. Most bank cards charge a processing fee, a replacement card fee, an ATM fee, a telephone inquiry balance fee, a monthly maintenance fee, an expiration fee and some charge a fee to re-load the card.

5. You Can Counter The Fees
Before you buy a retail or bank card, read the fine print on the gift card, card jacket, or website. Understand the fine print and the cost associated with your particular card. Each card has a different set of rules.

Summary
Fees are usually charged with gift cards, much more so with bank cards than with retail cards. If you are given a gift card, use it right away. If you if you plan to give a gift card and you don’t think it will be used right away, give cash. Cash is still the least expensive, universally accepted gift.

Lois Center-Shabazz is the author of the three time award winning book, “Let’s Get Financial Savvy!” and the editor of the critically acclaimed website, www.MsFinancialSavvy.com

Very simply, gift cards are like gift certificates and they can be purchased at most stores in a variety of amounts. They are the perfect gift to give for people of any age and with any taste. Think about the person you need to  purchase a gift for. Of course you know the basic details like their age and gender, but it might help to know if this person has any special hobbies or skills. If they love to snowboard perhaps you can get them a gift card from a  local snowboard shop. If you know a woman who loves to read there are countless bookstores that sell gift cards. So do a little bit of detective work to determine what kind of store your intended would enjoy gift cards from.

If you aren’t sure of any specific things that the person you are buying for enjoys, take heart, there are plenty of stores that sell gift cards to meet your shopping needs. Consider buying gift cards to department stores or other general stores that sell a variety of items. You can never go wrong purchasing gift cards at stores that offer many options.

Another great thing about purchasing gift cards for any occasion is that most people love receiving gift cards. Who doesn’t love being able to go into a store and spend their money on the thing they like most? Most everyone would prefer receiving gift cards over having people guess on items they will like, especially for important events like weddings. So, even if you feel like giving gift cards seems impersonal, think about how much your friend or loved one will appreciate your desire to have them pick out the gift they love the most.

Gift cards are great because they are quick and easy to buy. Simply place the gift card in a handwritten card and you have your gift taken care of. The person receiving the gift cards will also love how easy it is to save and then use their gift cards. They will not have to fake a smile or a thank you and they will not have to hassle with returning items that they will never use.

Everyone is better off when gift cards are given as gifts, so make a list of all the gift cards you need and then head off to purchase them. You will have your list complete in no time and your gift cards will be loved and appreciated by all who receive them.

About The Author: When he isn’t busy giving gift cards, Matthias Reightman loves to write articles that encourage others to become good gift givers. Find out more at http://www.aboutgiftcards.info (editors note: link no longer appears active)