Getting locked out of your gift cards

If you are one of the many people who frequently give and receive gift cards, do you know about the fees and fraud protections in place?

To Vanessa Abron, a gift card is often the perfect gift

“I tend to give gift cards mainly for things such as baby showers, wedding gifts, bridal showers and things like that,” she said.

Vanessa loves receiving them too. Her favorite type is something called the open loop gift cards, which are network branded and can be used almost anywhere.

“I like the fact that having a gift card that doesn’t limit me to one store just gives me the flexibility to buy anything that i want to buy,” she explained.

Abron’s a savvy shopper and always reads the terms and conditions before buying or using a card. So she was shocked when she found out that you could be locked out of your card.

Matt Schulz, a senior industry analyst with creditcards.com explains why you could get locked out.

“Sometimes these, these gift cards will get locked and it’s really all about fraud,” he said.

Experts say if an issuer is concerned a gift card is being used fraudulently, a temporary hold may be placed on the card.

“If, for example, it’s used in rapid succession or if there are a lot of returns of items that were purchased on the card,” explained Jason Oxman, CEO of the Electronic Transactions Association.

Oxman said these suspensions are rare and are designed to protect consumers and gift card issuers. His advice if you get locked out of your card?

“Simply call the toll free number on the back of the card. That will allow you to speak to the customer service representative at the issuer, who can clear up any concerns that the issuer has about the usage of that card,” he suggested.

Oxman also points out, that just like with traditional credit cards, regular returns can mean funds might not be immediately available.

“Because the merchant wants to, obviously make sure that the item was returned in good condition and there’s no fraud taking place,” he explained.

For anyone looking to buy an open loop gift card, experts say it is a good idea to give the recipient the receipt for the card in case they have any issues making purchases and need to know where the card came from.  Also, be sure to carefully read the terms and conditions since some cards have dormancy fees.

“If you don’t use the card for a year or something like that, they may charge you a monthly fee for not having used it,” said Shultz.

Another tip from the experts is to shop around for your gift cards. Even though there are only a handful of credit card networks, there are lots of different card issuers that compete for your business, and have different terms and conditions and fee structures.