Heads up Holiday Shoppers: Beware of Rip-Offs When Buying Gift Cards

Remember the Tickle Me Elmo hysteria a few years back? Shoppers were literally trampling each other for the perfect gift. The following year it was the Nintendo Wii that got holiday shoppers all fired up. And this year experts predict that Elmo Rock will have moms and dads knocking down doors. Target, WalMart, and Toys ‘R’ Us are already stocking up to meet the demand.

But this year, like every year, the most popular holiday gift in the nation will be a 3” x 2” piece of plastic - and you don't have to sleep in a store parking lot to get one. According to the TowerGroup research firm, gift cards will be the top present again in 2011. Last year American consumers spent more than $91 billion on gift cards. And a recent BIGresearch study found that well over half of American adults would like to receive a gift card this holiday season.

Gift cards are great. But for consumers who purchase gift cards with hidden fees or expiration dates, you could again fall victim to this year's biggest holiday rip-off. Expiration dates and fees erode the value of the cards, sometimes leaving the recipient with nothing.

Sen. Katie Sieben and I authored a bipartisan Minnesota law that offers some important consumer protections for those who buy and receive gift cards. The law prohibits expiration dates and hidden fees on gift cards sold in our state.  Other states across the country have followed suit. But the law only goes so far - and some gift cards aren't covered under the new law.

In order to get your money's worth, holiday shoppers in Minnesota should:

1. Avoid bank cards and cards issued by credit card companies, which are subject to federal law and still can have fees and expiration dates.

2. Look closely at the card’s fine print.  Even though it may look like it comes directly from the retailer, the small print may reveal it is a bank card with fees and an expiration date.

3. Avoid cards where you can see the number on the card before purchasing it - these cards are popular with cyber-thieves who use the number to make online purchases without having to buy the card.

If you don't pay attention, gift cards can soon become the gift that keeps on taking, rather than a gift that keeps on giving. That's why we worked with retailers and then-Gov. Pawlenty to pass Minnesota's gift card law. Particularly in this challenging economy, it has never been more important to get what you pay for.