Gift Card Basics: Best Buy, Visa, Mastercard or Starbucks

Everything you need to know about giving and using a gift card this holiday season and beyond from the consumer experts at Retrevo.

A gift card can be a very practical gift. You can get someone a holiday gift card, or a prepaid gift card for any occasion. Instead of buying someone something they don't really need or want you can give them the freedom to shop for themselves.

You can purchase a Visa gift card, a Best Buy gift card, or anyone of hundreds of gift cards available at your local Safeway or favorite retailer. Gift cards come in all denominations; you can buy a $50 gift card, $500 gift card, or higher. Gift cards are not all created equal. Many have fees and restrictions while others don’t. When some gift card providers started adding exorbitant fees, state governments stepped in and passed laws forbidding many of the consumer unfriendly features. Unfortunately, most of the rules only apply to retail chains, leaving banks free to add as many fees and restrictions to their gift cards as they like.

Visa gift cards carry a $2.50 monthly maintenance fee after 6 months, charge $.35 to check the balance, and the card expires after 2 years, not to mention the $5.00 replacement fee for lost or stolen cards and $7.00 to close a gift card out. Visa also charges $4.95 to ship a gift card first class. A Mastercard gift card or American Express gift card carries similar fees.

For all the cautions concerning bank gift cards, they are not vulnerable to the scams associated with retail cards which occur rarely, if at all. Check out Retrevo’s report on gift card scams for more information.

Best Buy gift cards, on the other hand, have no expiration date, don't have fees, and don't charge to check the balance. Best Buy gift cards, Circuit City gift cards, and other retailers' gift cards typically don't carry any fees since the retailer makes money from the transaction; however, unlike bank-issued gift cards, you can only shop at the retailer's store or web site. Before you start feeling sorry for the retailers keep in mind Best Buy reported that it would probably make $43 million from unused gift cards last year.

Consumer Reports has a state-by-state list of rules for gift card providers.

Many supermarkets have racks of gift cards for everything from Starbucks to your local movie theater. The state rules apply to most of these cards so, for example, in California, they won't have any fees or expiration dates although California permits a $1 a month fee under certain conditions.

Retrevo has put together this comparison chart* of some popular giftcards:



Best Buy Circuit City The Sharper Image Sears Starbucks iTunes
Redeem for cash? yes, with Cirrus or Interlink logo no no no no yes, if unused no
Added fees?

$0.35/signature transaction

$0.50/PIN transaction

$2.50 mt. fee 1

$3.25/cash withdrawal 2

no no no no no no
Expires? 24 months no no no no no no
Shipping and handling charges? $4.95 minimum no no no no no, except for customers in AK and HI no
Use online? yes, must register online first yes yes - yes no yes
Use at many retailers? yes no no no no Starbucks within grocery stores, airports, etc. may not accept no
Can be combined with cash (split-tender transactions)? yes yes yes yes yes yes yes, with Paypal or credit card
Free shipping with online purchases? yes yes yes yes yes yes yes
Check balance online? yes yes yes yes yes yes yes
Range? $25-$500 $15-$200 $5-$500 $25-$500 $5-$500 $5-$500
(in stores) $15-$500
(on starbucks.com)

*note: fees may vary from state to state

1 maintenance fee begins 7 months after initial purchase

2 only with Cirrus or Interlink logo

Retrevo's bottom-line advice: Use a retailer's card when possible. If not, use gift cards as soon as possible after purchase but definitely within six months.

When you’re trying to decide how to spend your gift card, don’t forget to use Retrevo’s Product Advisor for popular products like digital cameras, GPS, camcorders, HDTV, and more. You can also find reviews and manuals for all popular gadgets and gear.

You can also get some ideas on how to spend your $50 gift card or your $500 gift card on Retrevo lists.

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