Watch out for those gift cards with strings

Dear Fixer: My 10-year-old son got a $50 Visa gift card from a family member for his birthday in April 2008. Rather than spend it right away, he decided to "save it for something really cool." I was proud. I had always encouraged him to be wise with his money.

The card clearly indicates: "good thru 08/10" on the front. So I didn't see any harm in encouraging him to be a wise saver.

But when he decided to spend the $50 gift card this month, it was only worth $35, apparently due to some small-print monthly maintenance fee that started after the 13th month.

So now I thought I'd teach my son a lesson in fairness.

I called the number on the card. No help. I called the corporate headquarters for the marketer, IDT, and left seven different voice mails.

None have been returned. I called Visa. They only gave me the issuing bank's number. I left repeated voice mails for a rep in the gift card division of what was once Marshall Bank, NA. They have gone unanswered, too.

I know it's only $15 (soon to be $17.50). But to a 10-year-old, it's as good as $1,500! And how many other kids have lost money on gift cards they thought were actually "good thru" the "good thru" date? What's the purpose of that date? It seems dishonest, or at least deceptive. Who knows when a gift was actually purchased?

The card also indicates that the gift-giver had to pay a $4.95 card fee at purchase just to buy the card!

Can you help me show a thrifty 10-year-old what justice is all about?

Phil Sasso, Melrose Park

Dear Phil: We were happy to preserve your 10-year-old son PJ's innocence a bit longer. Though you do realize it's just a matter of time before he learns about rebates and extended warranties.

The Fixer e-mailed Visa to ask why PJ's gift card had dropped 30 percent in value in a relatively short time. That must have done the trick, because within a few hours, you heard from the marketer that the full value was being restored to his card as a courtesy for five days, at which time the fees would kick in again. It was a short extension, but at least PJ will be able to get the giant Chicago Bears logo he wants for his bedroom wall.

The Fixer has heard complaints now and then about credit card-type gift cards losing value to pesky monthly fees. So our advice is if you receive one over the holidays, use it ASAP. And if you're giving a card, consider buying a merchant card that doesn't have a purchase fee and won't lose value.

And be careful about buying gift cards or gift certificates to stores, spas or restaurants that are on shaky ground financially because once they go under, you'll have to get in line behind every other creditor. In most cases, you'll never get your money back.

According to the Consumer Federation of America, most of the $50 billion that consumers are estimated to spend on gift cards this year will be for store cards that have no fees or expiration dates. That's good. But nearly $4 billion will be spent on credit card-type gift cards, which can carry high purchase prices and hefty monthly fees. The good news for consumers is beginning in August 2010, companies will be prohibited from charging fees on gift cards if they have been used in the previous 12 months. The protection is part of the landmark credit card legislation passed earlier this year.

But we still have another holiday shopping season before that law takes effect ­so be careful.

Getting the runaround about a consumer problem? Tell it to The Fixer at www.beaconnewsonline.com, where you'll find a simple form to fill out. If you don¹t have a computer, you can mail a brief description of your problem, along with your name, address and telephone number, to: The Fixer, c/o The Beacon-News, 495 Commons Drive, Aurora, IL 60504. Don't send original documents. Due to the large volume of submissions, The Fixer can't make personal replies. Letters are edited for length and clarity.