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Blog: Gift card buying tips

A gift card is a very convenient and popular present to buy at this time of year. However, the Queensland Consumers Association advises buyers to choose ones that will be useful to the receiver, have fair terms and conditions, and have reasonable fees.

Many people think that gift cards are like cash or credit, or debit cards, but they are not. Often gift cards can only be used at certain places and only for some types of transactions, and may have complex terms and conditions.

So, when thinking of buying gift cards as presents ensure that the card will suit the recipient. For example, will it be easy for the recipient to use online or at a particular store or group of stores, and is it for a relevant product or service?

Also, check that the terms and conditions are fair and will not be unduly restrictive for the recipient. For example, minimum spends, no change given, or not usable online.

Expiry dates are less of a concern now that most gift cards must have a minimum 3 year expiry period. However, some cards have the advantage of no expiry period.

E-gift cards are now widely available and used, and have some advantages over plastic – they can be bought and delivered online, are less likely to be misplaced or lost, and can be stored on a phone. Make sure to confirm the terms and conditions are acceptable.

The cost of buying some gift cards may be significant, and there may be a processing or administration fee. If the card will be posted there is likely to be a postage charge. To avoid, or reduce the cost of fees, look for gift cards that will still suit the intended recipient but do not have any, or only low, fees.

If a gift card is bought with a credit card, the transaction may be treated as a cash advance for which the credit card issuer is likely to:

• charge a 2-3% fee
• charge interest immediately and possibly at a higher rate than for a normal purchase
• not give rewards points.

To avoid cash advance fees and interest charges, consider paying for gift cards with a debit card or cash. Some gift cards may also be available at a discount, for example when you are a member of a club, society or rewards scheme.

In some situations cash may be a better gift because it can be spent anywhere, does not expire, and does not come with any tricky terms and conditions.

For more smarter shopping tips visit the Queensland Government’s “Tips to becoming a smarter shopper” resource.