Gift Card Problems Mar Holidays for Many

Every year, the holidays bring good cheer, glad tidings and all that, but they also bring a sleigh full of complaints about gift cards. This year was no exception.

The most common complaint, of course, is that the cards don't work. That's what happened to Chris of Kirkland, Wash., who wrote to us about his American Express gift cards.

“Received three Amex eGift cards,” said Chris. “They all decline, $75, $50, and another $50. This is an American Express banking scam.”

“They make these available on their website for quick purchase, confirm, and send but do not allow for these cards to be used online or in store. Every transaction was declined,” Chris complained.

Delores of Miami received a $50.00 American Express gift card for Christmas but the experience has so far left her with little more than a case of indigestion.

“We tried to use it today towards an $89.64 meal at a Hillstone Restaurant in Coral Gables, Florida. The waiter told us he would charge us another 20% to use the card. Since we would still owe $39.64 plus the gratuity, this made no sense,” Delores said. “We called American Express Gift Cards and did not receive a satisfactory explanation as to why an American Express merchant would not accept the card.”

Quintin of Escondido, Calif., was also left with a bad taste in his mouth.

“I received a $25 American Express gift card for Christmas. I activated it on their website and saw there was indeed a balance of $25. I tried to purchase an item on eBay, but it was declined because they could not verify the cardholder's address. I tried a second time … the card was declined again.”

Puzzled, Quintin went to the Amex Web site where he found that $2 had somehow been debited from the card.

“If my card was declined from making a purchase, then why is money being taken from my card at all? By the way, my Visa gift cards and MasterCard gift cards work just fine,” Quintin told us.

Best Buy

Kathy of Pleasant Prairie, Wis., was one of several consumers we heard from who had hoped to use a gift card to pay for something she had already purchased. This, unfortunately, isn't permitted by most gift card issuers.

Kathy said she bought a smartphone at Best Buy and a few days later, her son gave her a gift card which she tried to apply against the bill for the smartphone.

“They would not apply it to the bill,” she said. “He gave me a lot of money” but she is unable to use it except to buy additional merchandise.

Kmart

Rich, of Evanston, Ill., has lived in Illinois his entire life and felt he wanted to support Illinois-based Sears and Kmart, which had a rather feeble holiday sales season. Now he regrets it.

“I bought $50 worth of goods … which entitled me to a $5 gift card which was supposed to work the next several days,” he said. “I went back two days later [when] the card was valid and they said that they would not accept it for some reason. I wasted my time and money to drive there. I went again several days ago and they said that the card expired already. What a scam! Good one Kmart.”

Meijer Stores

April of Jeffersonville, Ind., is miffed because Meijer would do nothing to help her when $100 worth of gift cards went missing minutes after she bought them.

“I purchased $256 worth of items on 12/21 and $100 was in gift cards. I checked out at 3 pm, and called the store at 3:12 pm reporting my gift cards missing, then went back to the store to have them cancelled,” she said. “I was told I was just out $100 because they can not cancel gift cards (more like will not). I asked to speak to a manager, Kenn, who told me he would review video with Loss Prevention and call me the following day. I still have not received a phone call.”

Ann is still steaming, not only about the $100 but also about the treatment she got: “My experience involved 4 Meijer employees, all who were rude as could be! … I guess they got my money and could care less if I got what I paid for!”

Sam's Club

Ann of Colorado City, Texas, received a Sam's Club gift card from her daughter, only to find that the card would not work.

“My daughter bought this at Sam's in Odessa, it was debited from her bank account with her grocery purchase. She does not have her store receipt, she thought I had spent the card so she threw away the receipt. There should be some way for her to get her money back if the card doesn't work,” Ann said.

“I called the 800 number numerous times, to no avail. “Money is hard to come by these days. It was our Xmas gift, but now I guess its your (Sam's) Xmas gift,” Ann said ruefully.

Toys R Us

“I purchased an iTunes gift card worth $25 on Christmas for my son. After opening the card and trying to redeem it, it continuously gave error messages,” said Cecilia of Queens Village, NY. “I took the card with my receipt to the store of purchase and spoke with a cashier. She said that they couldn't give me my money back as they do not refund gift cards.”

Cecilia thought that was odd so she asked to speak to the manager, only to be told: "The manager will not help you; she'll be helping me."
Cecilia thought that was rude but held out hope the manager would help her.

No such luck.

“I then spoke with the manager, and was told I cannot be refunded my money even though the card was non-functional. I was told that it was not their problem, and that I had to contact Apple even though I purchased the card at Toys 'R' Us,” she said. “I then went to the Apple Store and was told that it was Toys 'R' Us’ problem because the card was not purchased from them. I did not receive any value for the gift card which was $25.”

Walmart

Cindy of Winnsboro, Va., shelled out $410.68 for 11 Vanilla Visa gift cards from Walmart.com, intending to give ten of them as Christmas gifts. She activated them by email, following the instructions provided by Walmart and assumed that all was well.

But all was not well, as Cindy learned when she tried to use the eleventh card on Dec. 14, only to have it declined. She then learned that only seven cards had been activated. Through much back and forth with Walmart, one of the remaining cards was activated, leaving three that were not activated and not suitable for gift-giving.

“Someone has collected interest for months,” Cindy said. “If widespread problem (intentional) then [it's] a case of fraud.”

Our advice

Admittedly, this is just a sampling of the experiences consumers have had with their gift cards. No doubt, there are millions of stories that had a happy, or at least routine, ending.

But why take chances? If the person on your gift list is someone you'll be seeing in person, stop by the bank and get some crisp $50 bills. Put them in a gift card and hand it over. We have never met anyone who objected to getting cash.

If your giftee lives far away, you might consider sending a check. Assuming the person has a checking account, this is as good as cash. And, like cash, it can be used anywhere at anytime for anything – which is something you can't say about gift cards.