NEW YORK – It's easy to run out of ideas for what to give to all those friends, relatives and co-workers when the holidays roll around.
Gift cards can ease your burden. These days, you can buy them in various denominations and can find them for all types of stores, restaurants and services.
But if you don't choose carefully, you could end up giving a gift that gets slowly eaten away by fees -- before the recipient gets a chance to spend it!
Few people are aware of the hidden fees in gift cards, according to a July 2004 study by Synergistics Research, a market-research company.
Common gift-card pitfalls include:
Expiration dates. Some are as short as a year.
Dormancy fees. These kick in if the card isn't used within a set time -- usually between six months and a year. The fee can be as high as $2 per month.
Balance/maintenance fees. A low percentage of your remaining balance will be deducted every month after the card isn't used within a set period.
Limits on cash back. If you redeem your gift certificate for merchandise valued at less than the gift certificate's value, you may get cash back for the remainder. Other gift cards don't offer cash back, even if the remainder is a few pennies.
Whether you're the giver or the receiver, check the details of your gift card. Fees and limitations are typically written in fine print on the card, or somewhere on the packaging. If you're the purchaser, ask a store or company representative for the details.