Surprise! Tricky terms of use you might want to know about before using your gift card

A reader wrote in about a host of surprises that turned a gift card intended as a nice gesture into a big pain instead.

Visa and other national gift card issuers don't make the terms of the cards a secret. But, let's face it, who sits around reading them? There are a lot of terms and conditions and most people don't know them until they run into them. Unfortunately, that's about the worst time to find out.

Want to use your $50 gift card for dinner? Better hope the tab is going to be $40 or less. Why? Most restaurant transactions are processed with a built-in 20% tip -- just in case the customer decides to go that route. So, that authorization for the extra 20% means a $50 card will be rejected if the bill is more than $40, because room for the tip is being held. Getting a card rejected is no fun for anyone, particularly in front of people at a restaurant.

Plus Visa points out that it's not only restaurants that ask for that extra 20% of authorization. Hair salons, bars and even taxis -- anyone expecting a tip -- might ask for that.

Another potential sticking point is online transactions. Sites want to know your credit card billing address, something not normally attached to a gift card. So, you most likely will have to register the card to put in an address and more than likely provide way more information that you'd like to just to use your gift.

Then there are the fees. Not all cards are created equal. The clock ticks a little differently on each card, so pay particular attention to when so-called dormancy fees kick in. That's the amount of time that has to pass with no use before the issuer starts taking back the money bit by bit. Some also have maintenance fees that could kick in within six months.

Gift cards are a great deal for the issuers since so many people forget to spend them. That means your $50 gift card could turn out to be a $50 gift to a bank.

The rules on gift cards are set to change next August (due to the credit card reform law) giving consumers more of a cushion before fees kick in and requiring more upfront disclosure. So, for now, if you're a gift card recipient spend it with your eyes open and quickly -- before you forget you've got it.
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