Bankrate Reports Results Of 2006 Gift Card Study
Ellen Cannon reports for Bankrate.com on their third annual Gift Card Study. "Bankrate reviewed 38 plastic cards and seven electronic cards from the nation's leading 25 retailers (as ranked by the National Retail Foundation) and the four top credit card issuers. The study examines expiration dates, fees, state regulation guidelines and dormancy policies associated with gift card purchases. Bankrate's survey also includes information on the latest trends in gift cards, such as personalization and Web sites where unwanted cards can be bought, sold or traded." A handy comparison chart of all of the gift cards included in the survey is also available online.
From the Bankrate.com press release announcing the survey results:
Industry experts say that nearly seven out of 10 consumers will purchase a gift card this year. "Gift cards offer consumers a great convenience, but there's often a price attached," said Ellen Cannon, assistant managing editor at Bankrate.com. "A little research can save consumers in unwanted fees and surcharges," Ms. Cannon added.Key findings of the survey are:
- A strong divide exists between "use anywhere" cards from major credit card issuers and those from retailers. Those from major credit card issuers all carry fees. Fees are far more rare in cards from individual retailers because they can profit from the merchandise purchased with the cards.
- The average delivery fee on a major credit card gift card is $3.60. Discover Card had no shipping fees last year; this year they charge $3.95 for each gift card or $6.95 for a premium gift card package.
- The major credit card issuers continue to charge monthly "maintenance fees" if the gift card isn't used within a certain period of time, ranging from $2 per month to $3. All but American Express have expiration dates.
- More states have passed laws prohibiting expiration dates on gift cards. A few have also passed laws against the practice of not allowing gift cards to be redeemed for cash. (States that forbid expiration dates: CA, CT, LA, ME, MD, MA, NV, NH, ND, OK, RI, VT and WA. Many other states have this type of legislation pending.)
- American Express now offers personalized gift cards on which the recipient's name can be embossed. AmEx gift cards can also be purchased in stores this year, whereas last year they were available only online.
- Of the electronic cards surveyed, only JCPenney allows the cards to be used to purchase merchandise in stores. The others -- Wal-Mart, Costco, Target, Macy's, Bloomingdale's and Kohl's -- allow electronic gift cards to be used only online or for catalog items.
Retailers are becoming more efficient at "fulfillment" -- delivering cards to the buyers faster. - A number of retailers, such as Food Lion, Hannaford and Kash n' Karry, now offer re-loadable gift cards.
To view the complete findings of Bankrate.com's 2006 Holiday Gift Card Survey, go to www.bankrate.com/giftcardsurvey.
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