Giving a gift card this holiday season? Watch out for hidden fees

From retail to dining to dollars, there's a gift card for everything.

For the most part, closed gift cards for specific retailers are straight forward. You know what you're getting.

But for open gift cards that can be used anywhere, you've got to watch out for hidden fees.

It's all due to charges from the bank behind the card and the card processor for services. The activation fee itself can be as high as $5.95, paid when the card is first purchased.

"Some cards have monthly fees, where if you don't use it every month, then it might take $3 or $5, or even a small percentage away from the balance that remains on that card," said Joshua Dorsey, an assistant professor of marketing at Cal State Fullerton. "Some have per-use fees. When you use it, it might take a dollar per use."

Dorsey says consumers should also look out for expiration dates and anything else in fine print.

"We really urge consumers to be proactive in redeeming those cards," Dorsey said. "Again, a lot of the penalties and fees have been reduced, you get a broader time before the cards expire, but it makes us be a little bit more complacent and we have to be sure to fight that and make sure we get the gift that the person who gave it to us intended."

Some solutions? Write a check or just give plain cash.

"Personally, I really love Venmo," said Dorsey. "It's something that I use myself. It's a peer-to-peer money transfer platform. It's really nice because it gives the ability to have instant transfers of money. There's no fee if it's within that platform from user to user."
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