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Gift Cards

Sometimes people choose to buy something without picking out a specific item. This most often happens when you want to buy a gift for someone but you cannot decide what to get. When you do this you are pre-paying for an item you have not received.

It can also be difficult to redeem the full value of the card because the person is not likely to find something for that exact amount. They are then left with the choice between having a small amount left on the card that may not be usable because there are no items in the store for that amount or putting in some of their own money to buy an item that is worth more than the gift card. Surveys estimate that up to almost half the money placed on gift cards goes unspent.

Canadians love to buy gifts cards and roughly ¾ of Canadians give and receive them yearly. However there are drawbacks to the convenience of these cards and some surveys even suggest that although we love to give them we hate receiving them!

Although people choose gift cards for added flexibility they may in fact reduce your options. Many stores offer cash returns on items that have been purchased but turned out not to be what the person wanted, however gift cards are not generally refundable. This means the person you give it to will never be able to get a refund to spend elsewhere. As well there is always the possibility of the retailer going out of business before the gift card can be used.

On the upside there are now protections in place that prohibit expiry dates on gift cards. As well any activation, maintenance or usage fees must be included in the purchase price of the gift card. Once the card is purchased businesses can only collect fees to replace the card or to personalize the card. If a business is not complying with these rules they can be reported to the Consumer Protection Division by emailing

It is important to note that these protections do not apply to all types of cards.

One notable exception is prepaid credit cards from credit card companies like Visa or Mastercard. These can seem like the ideal gift for that impossible to buy for person because you can put money on the card and the person receiving the prepaid card uses it just like a credit card to make purchases. The attractive feature of these cards is their flexibility, including the ability to make online purchases. The unattractive feature of these cards is that the money you put on can be eaten up by various fees.

There is often an initial cost to buying the card, called a membership fee, as well as yearly costs for maintaining the membership and monthly administrative fees. There are often also charges to put additional money on the card and even to check the balance on the card. Unlike gift cards, which by law can no longer have an expiry date, these cards can expire and the terms of the card can state that you lose any balance remaining on the card.

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