It’s tempting to give gifts cards. But there’s a downside—up to 19 percent of those gift cards will never be redeemed. Consumer Reports says if you decide to give gift cards, pick your cards carefully.
Gift cards are definitely better than they used to be. New regulations have eliminated some fees, so you can’t be charged if you don’t use the card within the first year. And cards can’t expire for five years.
But even with new protections, there are still drawbacks. The new rules only apply to merchant and bank-issued cards. So if you have a reloadable card or any card not marketed as a gift card, you’ll want to pay close attention to those terms.
Bank-issued cards are convenient because you can use them almost anywhere, but they come with fees. The Visa Gift Card from U.S. Bank costs $3.95 if you get it from a branch or $6.95 if you buy it online. And after 12 months you’re charged a $2.50 inactivity fee if you don’t use it.