The lowdown on holiday gift cards

Before you give that hard-to-shop-for someone a gift card, be sure to take a close look at the fees that come with it.
There's nothing remotely festive about monthly maintenance charges and other fees your gift card recipient may be tagged with. And the hefty shipping, handling and service fees charged to the gift-card giver can take a big chunk out of any budget. As appealing and convenient as gift cards may be, you'd better take a good look at the boring old fine print that comes with it.

And while several states have passed new gift card laws aimed at bolstering consumer protections, being a smart and savvy card shopper is still the best protection of all.

Here are 10 important questions every gift card giver and recipient should ask:

1. Where can I use my gift card?
The answer depends on the type of gift card that is purchased. There are two kinds of gift cards: store-specific gift cards and general-purpose gift cards.

You can use a store-specific gift card to buy merchandise from a particular store or through a store's Web site. Not all gift cards can be used for online shopping, so be sure to ask. A general-purpose gift card from Visa, MasterCard or American Express may be used almost anywhere those cards are accepted. Important exceptions, including airline tickets, may apply. Be sure to check with your gift-card program for details. The key advantage of general-purpose gift cards is the flexibility you have in using the cards. The downside? Fees, fees and more fees. Many general-purpose gift cards come loaded with fees. It's important to shop carefully.

If you know a person's tastes, a store-specific gift card may be the way to go. Store gift cards are less likely to charge hefty fees.

2. When does the gift card expire?
Is your gift card good for six months? A year? Even longer? Be sure to check.
With some gift cards, once you pass the card's expiration date, you're done. It doesn't matter how much value is still on the card, you won't be able to use it.

Other gift-card programs will send you a replacement card with your remaining balance on it. But you pay for this privilege. Fees on replacement cards range from $5.95 to $10. Your best bet is to use your gift card before it expires.

States such as California, Washington and New Hampshire have passed laws eliminating gift card expiration dates. For details on gift-card laws in your state, contact the attorney general's office in your state.

3. Are there shipping and handling fees?
Ordering a gift card online is convenient, but you could be zapped with a fee for shipping and handling. A prepaid Visa gift card from National City charges a $4.95 to $8.95 fee for shipping and handling. Want that gift card delivered on the double? You'll pay more. You can minimize or avoid these kinds of fees by shopping early and purchasing gift cards directly from retailers.

4. Is there a service fee?
Gift cards purchased by phone or online often charge service fees. Service fees range from $3.95 up to $11.95. American Express charges its gift-card customers a $3.95 service fee for online orders and a $7.95 fee for phone orders. Buy a gift card from Bank of America, and you'll be charged a $5.95 to $7.95 service fee for online orders and a $9.95 to $11.95 service fee for phone orders.

You may be able to save yourself a few dollars per gift card by ordering your cards online rather than over the phone. Be sure to check.

States such as California and Washington have passed laws eliminating or restricting service fees. For details on gift card laws in your state, contact the attorney general's office in your state.

5. Is there a monthly maintenance fee?
Some gift cards will charge you a monthly maintenance fee if you still have a balance on your card after six months or a year. With the American Express Gift Card, a $2 monthly fee kicks in after a year. With the Bank of America Visa Gift Card, a $2.50 monthly fee kicks in after just six months.

Anyone receiving a gift card should immediately check for monthly maintenance fees. A $25 gift card could get whittled down to nothing before you know it. If your gift card comes with a monthly maintenance fee, you'll want to use it promptly. Whoever gave you the gift card meant that money for you, not the bank or retailer.

6. How do I check my gift-card balance?
Many general-purpose gift cards allow you to check your balance online and by calling a toll-free number. With store-specific gift cards, you may be able to check your balance online, in stores or by calling a toll-free number.

It's also a good idea to keep track of your balance on your own. Stash receipts for purchases made with your gift card in a safe place. That way you'll know precisely how much value is left on the card. Those receipts will also come in handy if your card is lost or stolen. With some gift-card programs, you have to supply your most recent receipt before a replacement card will be sent to you.

7. What happens if my gift card is lost or stolen?
With some retail gift cards, if you lose the cards you're just plain out of luck. For example, Barnes and Noble will not replace a gift card if it is lost or stolen.

Other retailers are much more lenient when it comes to lost or stolen cards. Both Bloomingdale's and Macy's will issue you a new card as long as you have proof of your most recent purchase.

Some general-purpose gift cards will send you a replacement card as well, but you may have to pay a fee. Replacement card fees range from $5.95 to $10.

Be sure to find out what recourse you have, if any, if your gift card is lost or stolen, and guard your card accordingly. It's best to treat a $50 gift card as you would treat $50 in cash. And don't forget to hang on to your receipts. You may need them to get a replacement card.

8. Can I exchange my gift card for cash?
Thinking of cashing out a gift card? Think again.

Many gift cards aren't redeemable for cash. Plus, the general-purpose gift cards that will send you a check for your remaining balance are probably going to zap you with a substantial fee. Check processing fees can be as high as $10 or $15.

You'll get a lot more value out of your card by shopping with it rather than trying to cash it in.

9. Can I use my gift card to withdraw cash at an ATM?
Some general-purpose gift cards come with PIN numbers, so you may be able to use them to get cash from ATMs.

The downside is, once again, fees. The Bank of America Visa Gift Card charges you a $1.50 service fee each time you withdraw cash from the card at an ATM. The CharterOne MasterCard Gift Card charges you $2 for each ATM withdrawal.

10. Can I make a purchase for an amount greater than my gift card?
Yes, you can, but you'll need to be careful. First off, be sure to tell the merchant in advance that your gift card will only cover a portion of your purchase. If you don't, your gift card will be declined.

Be aware that some stores, including department stores, will only accept two forms of payment for a single purchase if the second form of payment is cash or a personal check.

So if you plan on using your gift card to pay part of a store bill, it's a good idea to bring cash or your checkbook along with you.

Want to apply the few remaining dollars of a gift card to an online purchase? It's going to be tough. Most Internet merchants do not accept two forms of payment for a single purchase. So unless you can find an online purchase for the exact amount remaining on your gift purchase, you're probably out of luck.

Source: YAHOO NEWS