FOR IMMEDIATE RELEASE
ICBA Offers Tips on Bank-Issued Gift Cards
Popularity of Branded Gift Cards Requires Consumers to Know the Facts
Washington, D.C. (Dec. 1, 2008)—As the holiday gift-giving season arrives, the Independent Community Bankers of America (ICBA) offers consumers tips for using branded gift cards, which carry the MasterCard, Visa, American Express or Discover logo and are accepted by many merchants.
“Branded gift card purchases are expected to rise by up to 137 percent during the 2008 holiday season,” said Cynthia L. Blankenship, ICBA chairman and vice chairman and chief operating officer of Bank of the West, Grapevine, Texas. “During these tough economic times, branded gift cards are especially practical because they are accepted by many merchants.”
Community banks offer branded gift cards at their local branches and online. They differ from retail gift cards, which are issued by and accepted solely at the issuing retailer. A recent FDIC decision determined that bank-issued gift cards are covered by deposit insurance, whereas retailer-issued cards may not be honored if a retailer goes out of business. The value of branded prepaid gift card transactions is estimated to rise from $32 billion in 2007 to $79 billion by 2010.*
As branded gift cards increase in popularity, ICBA reminds consumers how important it is to know the facts about them. Branded gift cards look like a credit card, are limited by the dollar amount loaded on the card by the purchaser and should be treated as cash. Some tips:
- Know the card’s terms and conditions—they vary and generally are listed on the card, the card jacket or a separate sheet accompanying the card.
- Some cards have an expiration date that may appear on the card itself, on the card's sleeve or on the issuer's Web site.
- Keep the card's account number and customer service number in a safe place. You may need this information should your card become lost or stolen.
- Sign the card in the space provided.
- Before using the card, know your balance. Most issuers offer toll-free voice response systems where you can check your balance. Some banks allow you to check the balance by entering the card number on the bank’s Web site.
- Funds are immediately deducted from the available card balance when you make a purchase.
- Most major retailers accept split payments—you can pay with the bank issued gift card and pay the balance of a purchase with another form of payment. But you have to tell the merchant the exact amount you want deducted from your branded gift card.
- It's a good idea to keep gift cards after the card balance has been used. You may need to show the card should you make a return or an exchange.
- There may be fees for maintaining the account beyond a certain time period. Gift card inactivity fees are usually printed on the back of the card or in an attached terms and conditions document.
- Be sure you have the available balance to cover incidentals and tips of 15 percent to 20 percent when using a gift card at service locations such as restaurants, hotels and rental agencies.
Learn more about gift cards by visiting your local community bank.