Listed here are nine major annoyances that you should look out for when buying or receiving a gift card. Twenty-nine states have imposed restrictions on gift cards, which might protect you from some of these hassles with some types of cards. And an additional seven states have adopted disclosure requirements only. For a list of state laws, go to www.ConsumersUnion.org/finance/StateGiftCardLaws.htm.

1

You lost your card and have to pay to replace it. Replacement fees are typical. For the Washington Mutual MasterCard Gift Card, the fee is $15, one of the highest that we've seen. But even if you have to pay a fee, consider yourself lucky. Some issuers, such as Red Lobster and Southwest Airlines, say that if your card is stolen, lost, or destroyed, you're out of luck. Others will replace the card if you have a receipt or some other credible evidence that you owned it.

2

Your card can't be exchanged for cash, or it can but it'll cost you. Many store cards can't be redeemed for cash, including cards from Best Buy, Borders, Fairmont Hotels, Simon Mall, and Starbucks. Some bank-issued cards can be redeemed but you'll probably have to pay a fee. For example, it costs $15 to redeem the Wachovia Visa Gift Card.

3

Your card's value is shrinking. Monthly "maintenance" fees, which are common with bank-issued cards, usually run a couple of bucks and kick in after 6 to 12 months. One type, "dormancy fees," applies only if you're not using the card, but some maintenance fees are assessed whether you use the card or not.

The iCARD Gift Card imposes a semiannual maintenance fee of $25 beginning six months after the card is issued. In its list of frequently asked questions about its Visa Gift Card, Wachovia says it will impose a monthly service fee after 12 months, but we had to read to the very end of the five pages of fine-print online terms and conditions to find out that it's $2.50.

4

Your gift card is expiring. Even cards that technically don't expire often carry expiration dates. To continue using them, you must ask the issuer to send you a new one. That's not only a hassle, but some issuers will charge for the service. For example, the Simon Giftcard's fee is $15. And many bank cards, such as GiftCards.com's Visa Gift Card, continue to charge monthly fees even when the card is inactive and can't be used. Other cards simply expire. In states that allow expiration dates, Macy's cards expire two years after the last added value. And if you hold on to West Virginia State Parks gift cards for two years, you'll be up the creek without a paddle.

5

You're charged a fee every time you use the card. The GiftCards.com Visa Gift Card tacks on a charge of 35 cents every time you use it to make a purchase; it's the only card we know of that does. But there are other ways to rack up transaction fees with cards. For example, using your card at an ATM, if it's allowed, can cost you $2.50 or so, even if you only want to check the card's balance. And that's in addition to any fee the ATM owner charges.

6

The card still has value, but it keeps being rejected. This can happen at a restaurant, hotel, car-rental company, or gas station. Such retailers place a "hold" on a fixed amount to cover what they think your total bill will be. For example, restaurants might assume you're going to add a 15 percent gratuity. A gas station might place a hold on $75, not knowing how much you'll actually pump. It can take as long as a week for the hold to be removed. In the meantime, other merchants might reject your card for insufficient funds.

To avoid this problem, try asking the merchant to authorize a specific dollar amount. And instead of swiping the card at the gas pump, go inside the station and use it to prepay for an amount of fuel you know your tank will hold.

7

You can't use the card anywhere. Issuers place many restrictions on where and how you can use your card. You might expect that a retail card can be used for any purchases from that retailer, but even that can be a problem. You can't use the CompUSA Gift Card at the company's Web site, for instance. Also, many retailers don't allow you to use the card to make a payment toward the balance on their own store-issued credit card. You might find that you can't use bank-issued cards at car-rental companies, cruise lines, gas pumps, ATMs, or casinos. The American Airlines Gift Card can't be used with travel agents, at airport ticket counters, or for flights originating outside the U.S. And Starbucks' gift cards might be declined at some of its branded locations in airports, supermarkets, and bookstores.

8

The card's Web site says that gift cards can't be sent to your state. Some states, including Connecticut, Hawaii, New Hampshire, Rhode Island, and Vermont, have tried to put an end to all the fine-print shenanigans by banning or limiting various fees or expiration dates. Some issuers, including American Express, won't sell cards directly in those states, but the cards might be available in stores.

9

You find it difficult to spend the last few dollars on the card. A merchant might refuse to let you combine the balance on the card and a second form of payment for the rest of the purchase. Such "split tender" transactions are especially problematic with bank cards and likely will remain so for years.