By John Campbell

If you have any unused gift cards lying around you may get some unpleasant surprises when you finally decide to redeem them. A number of fees and other restrictions can make a gift card not quite as useful as it should be.

With many gift cards, the funds aren’t always guaranteed. If you purchase a gift card you may be slapped with a purchase fee from some retailers. Other fees can also reduce a gift card’s balance before it’s ever used.

Within just a month some gift cards start getting hit with monthly dormancy or non-use fees. If too much time lapses before the card is used it could become worthless. Even without dormancy fees, funds from some gift cards can become unusable anywhere from 6 months - 2 years after purchase. Any funds that get drained from a gift card often become pure profit for the retailer that issued it.

On the flip side, if you purchase a gift card from a retailer that goes out of business before the card is used the recipient will lose the entire value of the card. As long as a gift card is redeemed in a timely manner, any potential fees or other risks become virtually a non-issue.

One issue that will likely play a strong role in your decision on whether or not you’ll even purchase a gift card is if there are any usage restrictions placed on it. To make sure you’re getting the most bang for your buck with a gift card you need to ask the following:

• Can the gift card be used at any of the retailer’s numerous storefronts?

• Are there any other retailers where the gift card can be used?

• Are there any goods or services the gift card can’t be used to purchase?

• Can the gift card be used to purchase items that are on sale or on clearance at the discounted rate?

You will also want to know if a gift card can be replaced if it’s lost. As long as you have the original receipt for the gift card purchase many retailers will replace it for you. You may have to pay up to $5 to get a replacement card, however.

Watch out for the hidden little catches associated with the use of some gift cards so your friends and loved ones can get the most value out of any cards you may purchase for them.

© cashbuzz.com
John Campbell is the writer and editor of CashBuzz, A financial portal for the rest of us. Check out cashbuzz.com for the latest articles on money management and tips and tricks that can help improve your finances. This article may be reprinted on your Web site if the copyright, author information and active link are included.