The Dangers of Gift cards
Lately, I have really been into gift cards. Mainly because it was an easy way to spend for a credit card bonus. This is when you get a credit card and they want you to spend a certain amount to get extra bonus points. I will write more on this later.
I had bought them before but in low denominations, like $25 or $50, but with needing to spend more they went up to as high has $2000. Thats when I started getting into trouble and a tale I will share so that hopefully you can avoid.
I like to buy gift cards from 3rd party sites like Raise.com or carpool.com. When you buy from them you get a discount on the cards that range from nothing to up to 25% off, but normally it ranges from 1% to 7% on normal stores. Thats the advantage.
Couple disadvantages though:
- You do not know who you are buying from. Unlike buying direct from the company
- You have no buyer protection with a gift card like you would a credit card. You have fraud on your Visa they will cover you but not always with a gift card.
- Gift cards can be lost and again unlike a credit card you might not be able to get a new one mailed to you
- This biggest one is when you buy from a 3rd party because this means now someone else has your gift card information.
On #4 above, my fun experience was when I bought a $2000 gift card for Amazon from a 3rd party site. I used it for 3 weeks with no issue and then my funds on that card were put on hold. The bad part was Amazon gave me no information on why. So, it took hours to nail down that they detected that my gift card was bought with a stolen credit card. Once I had that info, I had to spend more time with the 3rd party website I bought the card from. Now, I was able to get all my money returned but the hours it took was not worth the big 2% savings I got!
I was lucky enough to run into #4 again just a week later. I went to go use a Walmart gift card I had bought off a 3rd party website. Well, it had a zero balance and showed it was used up in a state 1000 miles away from me. Again, I was able to get the 3rd party site to return my money but was the effort/time worth the little savings. No!
- Buy direct from the business. It is not worth the few % saving for the possible hassle.
- If you do want to save a little, only buy when you are going to use the card immediately. This will reduce the chance for being flagged as fraud or someone else using them.