Gift-card swappers beware
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Doug Krizner: Clothing and DVDs were the top two holiday gifts this year. Any guess about what was third? Gift cards. More were given this season than ever before. And now, a growing number of websites allow you to trade them. But as Marketplace’s Sam Eaton reports, caveat emptor.
Sam Eaton: Consumers forked out approximately $26 billion in gift cards this holiday season. An estimated 10 percent of that credit will go unspent.
That’s spawning a vibrant online shadow market. Websites like MonsterGiftCard.com and PlasticJungle.com have created online swap meets for those who want to trade or cash in their gift cards.
Sound sketchy? Forrester Research analyst Sucharita Mulpuru says it’s definitely buyer beware.
Sucharita Mulpuru: There is certainly a risk of fraud. These are stored value cards. It’s very difficult to know what’s actually on the card until you actually go to a store and run it across a register. There’s a chance that the cards could have been stolen. There is a chance that the card doesn’t have what was represented to you when you had purchased it.
In response, many websites now guarantee the value of their cards. But with processing fees of up to 5 percent of the card’s balance, Mulpuru says value may have already taken a back seat.
I’m Sam Eaton for Marketplace.
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