Gift card fees are on the decline and card security protections are on the rise, according to a Bankrate.com report. Bankrate.com surveyed 60 gift cards to find out which have the most consumer friendly features.
Security protection is one of the most popular features added to gift cards this year. Half of the gift cards surveyed now offer the ability to add a security code, up from 35 percent in 2014. This can help protect the balance on a lost or stolen gift card.
In addition, 72 percent of the cards have some form of loss and theft protection, up from 68 percent last year. E-cards are more likely to have this protection than traditional gift cards.
These added security features are a good benefit for the one in four Americans who have lost a gift card. Millennials, 18-29 year-olds, are the worst offenders; almost four in 10 have lost a gift card before using its entire balance.
“With so many recent data breaches and the transition to EMV chip credit cards, security is top of mind for many Americans,” said Claes Bell, Bankrate.com banking analyst. “Retailers are taking note and have made gift cards a much safer way to spend money.”
Gift cards continue to be a popular choice – 76 percent of Americans have given someone a gift card and 83 percent have received one. The most common amount given is between $25 and $50. This is for all income levels.
The type of gift card people prefer depends on their age. Americans under 65 years old prefer a general-purpose gift card such as an American Express or Visa gift card, while those 65 and older prefer a gift card specific to a retail store or restaurant.
Although they’re the most popular, general-purpose gift cards cost more. For these cards in Bankrate.com survey, purchase fees ranged from $3.95 to $6.95, while only 4 percent of store-specific cards charge purchase fees.
“Gift card gotchas are much rarer than they used to be,” said Bell. “Everyone should still do their research before making a purchase, but generally, consumers don’t have to worry about being swindled when buying or using a gift card from a major bank or retailer.”
Additional survey findings:
- 67 percent of the cards are available as e-cards, up from 59 percent last year.
- Only 13 percent of cards have a purchase fee – down from 17 percent last year.
- Only 8 percent of the cards expire. Some expiration dates only apply for the physical card, not the funds loaded to the card.
Due to the problems with gift card fees, new rules were adopted in 2010 to protect consumers. See “Answers About Gift Cards” for more information.
In the past, Consumer Reports has advised consumers not to buy gift cards for presents due to short expiration fees, service charges, and inactivity fees. Now, due to the new regulations, Consumer reports no longer advises consumers not to use them.
