Are you planning to give a gift card to someone special? Are you confused about the various fees associated with the card? Do you want to avoid disappointment while giving a gift card?
If yes, then you should read this article on the common gift card fees. The best way to avoid disappointment with a gift card is to know and understand the gift card terms and conditions.
Below is a detailed guide on the gift card fee, which you should remember while giving a gift card.
What Are Common Gift Card Fees?
Most gift cards come with fees, and these fees can vary depending on the card issuer, the type of card, and the value of the card. Common fees include inactivity fees, Maintenance fees, Service fees, Activation fee, Monthly fee, Transaction fee, and Cash withdrawal fee.
Inactivity Fees
This is charged if the card is not used for a certain period of time, and these fees can be monthly or even yearly.
Maintenance Fees
This type of fee is typically charged every month, and they cover the costs of storing and keeping the card information safe.
Service Fees
Service fees are usually charged when the card is used, and they cover the costs of customer service and other card services.
Activation Fee
Many cards charge a fee to activate the card. This type of fee is charged when you first purchase the card.
Monthly Fee
Some cards charge a monthly fee. This fee is charged if you don’t use the card for a certain period of time.
Transaction Fee
A transaction fee is charged each time you use the card. This fee is usually a percentage of the total purchase amount.
Cash Withdrawal Fee
Some cards charge a fee to withdraw cash from the card. This fee is typically a percentage of the total cash withdrawn.
Why Do Fees Exist on Gift Cards?
There are a few reasons why fees may exist on gift cards. The first reason is to ensure the card is used. If a card has a dormancy fee, for example, it means that the card will be charged a small fee if it is not used within a certain period of time.
This encourages people to use the card, which is good for businesses. Another reason for fees is to offset the costs of running the gift card program. Gift cards involve a lot of costs, such as processing fees, customer service, and fraud prevention.
By charging fees, businesses can recoup some of these costs. While these fees may seem annoying, they are typically small and should not deter you from using gift cards. Just be sure to check the card terms and conditions so you are aware of any fees that may apply.
Shipping and Handling Fees May Apply to Gift Cards
If you’re looking to purchase a gift card for someone, you should be aware of the potential fees that may be associated with the card. Shipping and handling fees may apply, depending on where you purchase the card from.
Additionally, there may be fees for purchasing the card, as well as fees for using the card. Be sure to read the fine print so you’re aware of all the potential fees associated with the gift card.
How Can You Avoid Paying Fees on a Gift Card?
In general, you can avoid gift card fees by using it within the first year, and by monitoring the balance. However, there are some common gift card fees that you should be aware of.
For example, many retailers charge a “dormancy fee” of around $2 per month after 12 months of inactivity, so it’s important to use your card within that timeframe.
Additionally, some cards have maintenance or service fees, which are typically around $3 per year. These fees are often waived if you use the card within a certain period of time, so be sure to check the terms and conditions before making a purchase.
Of course, some cards may have expiration dates, so be sure to use them before they expire.
When Gift Card Fees Are Worth It
When considering whether or not a gift card fee is worth it, you should think about how often you will use the card and how long you plan on keeping it.
For example, an activation fee may be worth it if you plan on using the card frequently. On the other hand, an inactivity fee may not be worth it if you only plan on using the card once.
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What to Do if You Are Charged a Gift Card Fee
If you’re ever charged a gift card fee, the best thing you can do is to contact the customer service number on the back of the card. Many times, fees are charged in error, and customer service can help to refund the charge.
If you’re unable to reach customer service, or if the fee is indeed legitimate, the next best thing you can do is to use the card as quickly as possible to avoid paying any more fees.
Make sure to keep track of your gift card balance so you don’t get caught off guard by any fees in the future.
Know Everything About Gift Card Fees Now
After reading this article, you should be aware of the various fees associated with gift cards. While some fees are avoidable, others are not. If you’re not careful, gift card fees can eat into your budget.
Know what fees to look for and how to avoid them. With a little planning, you can give the gift of savings.
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