Gift Cards Don't Always Keep Giving

Dec. 26, 2005 — -- Retailers say 75 percent of Americans purchased gift cards this holiday season, and recipients seem to love getting them. But to avoid disappointment, there are several factors to be aware of when redeeming the cards.

The Montgomery County, Md., Department of Consumer Affairs analyzed 30 gift cards and fond those offered by credit card companies and banks all had some sort of expiration dates. many stores have stopped imposing expirations, but the study says Blockbuster and Macy's still do and Kmart gift cards feature retroactive fees that have the same effect.

More common are dormancy fees, where if you fail to use the gift card for a year or two, the store begins deducting a couple of dollars a month from its value until it's gone.

But one tactic made two members of Congress call for an investigation: of the gift cards that Montgomery County studied, two-thirds did not disclose anywhere on the packaging that there were expiration dates or fees.

So beware -- gift cards are the gift that doesn't always keep on giving.