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With a long list of retailers going bankrupt, now would not be a good time to be purchasing retailer gift cards. Forecasters speculate that 2009 is going to diametrically worse for retailers; the list of bankruptcy in 2008 could be small in contrast to what we will see in 2009. Purchasing gift cards from retailers often time fall under state laws as far as fees, and disclosures are concerned. But since when has a retailer been upfront about stating they WILL file for bankruptcy.

The inception of gift cards was blessing to most, it took the hassle of having to try figure out what the recipient wanted, this allowed the individual to just purchase whatever they wanted. After the initial pizzazz wore off, companies were quick to add fees, and stipulations that were for pure profit to the seller. Fortunately states enacted laws that protected users from extraneous fees; here is a list of states the stepped up to the plate http://www.consumersunion.org/pub/core_financial_services/003889.html

If you choose to go the way of national carrier Master Card offers gift cards, but does so under the guidance off the Comptroller of the Currency, Administrator of National Banks, U.S. Department of the

Treasury. Master Card discloses the terms of agreement per law, but look at exactly what they do it is scary; “We may disclose information to third parties about your Gift Card transaction history; 1) where it is necessary for completing transactions; 2) in order to verify existence and condition of your Gift Card and funds, such as to a merchant; 3) in order to comply with government agency or court orders, or other legal reporting requirements; 4) if you give us your written permission; 5) to our employees, auditors, service providers, or attorneys as needed.”

Furthermore the fees induced include; Card reissue fees $9.95 per card Applied for replacement of a lost, stolen, or expired card. Administrative Fee to Close Account $20.00 For mailing a check for the unused balance. Any balance over $20 will be mailed to you. Monthly maintenance fees $3.95 Charged each month value is remaining on the card.
This fee is waived for the first 6 months after card purchase. Customer service fees Below Automated balance and transaction inquiry Operator assisted information Web inquiries $0.50
$3.00 Free Paper statement fee $4.00.” Add up the fees, and the lack personal security, and the consumer is left with no viable choice.

So if you choose to buy a gift card for your daughter this Valentine’s day at Claries, be careful. The consumer will not be armed with the knowledge of a failing retailer. Once a business, and or corporation has filed for bankruptcy all assets are frozen, so no refund on the gift card, and once the store closes any remaining balance is gone for good. And if you choose to purchase a gift card from a company like Master Card, know that your information can be handed out to a third party at their discretion, and the fees often times cost you 30% or greater at the checkout stand.

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