Gift Cards That Keep on Taking
by January 5, 2004 12:00 am 68 views
Gift cards may seem like a great idea, but if the recipients don’t use them, then the gift-giver is just throwing money away.
According to Consumer Reports magazine, consumers fail to redeem about 10 percent of the money on gift cards. With gift-card sales expected to exceed $45 billion in 2003, that means $4 billion won’t be redeemed.
And some companies charge a “dormancy fee” for gift cards that haven’t been used after a certain period of time.
Bank of America charges a $2.50 monthly maintenance fee after six months if there’s still a balance on the gift card. Wal-Mart Stores Inc. hits shoppers with an everyday low charge of $1 per month after 24 months of card inactivity.
“We think the shopping card fees are reasonable,” said Dan Fogleman, a spokesman for Bentonville-based Wal-Mart. “They’re fully described, and they don’t kick in until after two years of account inactivity.”
Fogleman said it costs Wal-Mart to maintain the gift-card accounts even when the cards aren’t being used.
“It does cost us every month to house each of those cards separately,” he said.