American Express gift cards are no bargain at Walmart's site, where up-front fees range from $4.64 to $5.64. A $50 AmEx card costs $54.64, for example, and a $100 card is $105.64. Unlike with standard credit cards, users can't dispute purchases they've made with an AmEx gift card, which has no fees after purchase and never expires.
One of the most egregious fees comes from retailer Ikea, which adds an $11 shipping charge for all gift cards purchased over the phone. (You can't buy an Ikea gift card online.) Why the usurious charge? Ikea ships its cards via FedEx 2Day service, and no cheaper option is available. On the plus side, if you buy an Ikea gift card at one of the furniture giant's retail stores, you pay no additional fee.
New Consumer Protections
This year brought new protections for gift card users, including a series of U.S. Federal Reserve rules that took effect in August 2010 as part of the Credit CARD Act. The regulations cover both store gift cards (Best Buy, Ikea, Target), and those with an American Express, Discover, MasterCard, or Visa logo.
Among the new rules:
* Money on a gift card is good for at least five years after the card's purchase date. Funds added to the card at a later date are also good for five years.
* All fees must be plainly stated on the gift card or its packaging.
* Fewer gift card fees are allowed. New restrictions apply to usage, inactivity, and maintenance fees, as well as fees for adding money to the card.
* You can be charged inactivity fees if you haven't used the card for at least a year.
Your state may have additional protections that exceed the federal regulations. Consumers Union offers a handy guide that lists these protections by state. Be sure to check it out.