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Gift card fees, fraud protection you may not expect

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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.

Abron loves receiving

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them, too. Her favorite type is 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," added Abron.

While she's a savvy shopper and always reads the terms and conditions before buying or using a card, Abron learned something new.

"I was surprised to learn that gift cards can be locked," she said.

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"Sometimes these, these gift cards will get locked and it's really all about fraud," explained Matt Schulz,  CreditCards.com Senior Industry Analyst.

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," said Electronic Transactions Association CEO Jason Oxman.

Oxman says these suspensions, though rare, are designed to protect consumers and gift card issuers.  So, what do you do

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if your card is locked after a legitimate day at the mall?

"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 explained.

Oxman points out, 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 added.

For anyone looking to buy an open loop gift card, experts say it's 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

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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 Schulz.

Experts advise you also shop around for your gift cards. Even though there are only a handful of credit card networks, there are a lot of different card issuers that compete for your business, and have different terms and conditions and fee structures.

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