Penny auction sites love to tout the incredible deals that customers walk away with, but the reality is far less pleasant.  For every person that gets a great deal on an item, there are tens or hundreds, possibly thousands that spend money to bid that they can’t get back.

Well, their credibility has taken a further blow with reports (like this and this) that some of these sites are using auto-bidding bot software to bid up the auctions, thus costing all those that participate more money.

Don’t be lured by these phony deal schemes.  If you want a discounted gift card, purchase one from one of the many legitimate secondary marketplaces, like GiftCardRescue, Plastic Jungle, or CardPool.

Even though vendors have until January to comply with the new packaging requirements for open-loop gift cards, they are required to follow some of the new rules, like no expiration before 5 years and no fees until after 12 month starting August 22nd.  And like clockwork, the announcements for new and friendlier open-loop gift cards are starting to roll out, like this one from Wells Fargo/Wachovia.

Wells Fargo and Wachovia gift cards now will be valid for 7 years, 2 more than required by law.  They also carry a relatively low $3.95 purchasing fee and can be bought in denominations of up to $500 for Wells Fargo cards and $600 for Wachovia cards.  Like Amex, they have completely done away with the monthly fees, and if the expiration date on the card rolls by before 7 years, you can get a replacement for free.

I expect some open-loop vendors to try and scam consumers with expiration dates printed on cards.  As long as they comply with the law and offer to give you a replacement for free if five years from purchase hasn’t passed, they aren’t technically breaking the law, but surely some of the shadier vendors will discover that some percentage of people won’t realize this despite the law.

I expect most vendors to do away with monthly fees of any type for open-loop cards as this seems to be the trend and customers will learn to avoid the ones that do charge monthly fees like the plague.  This is good news for customers.

To replace a lost or stolen card now costs only $7.50, down from the $15 it used to cost.

Neither card can be used outside the US.

One thing to remember is that open-loop gift cards purchased from banks will require you to provide your personal information.

My wife and I rarely pay attention to our credit card reward points and were surprised recently to find that we had over 200,000 points saved up.  Because of some recent reports of banks like Chase reworking their rewards programs and heavily discounting points so they are worth only a fraction if what they were, we decided it is probably a good idea to use up our points now.

I found an item that I wanted, a new Canon EOS SLR camera that would have cost about 140,000 points.  Just to be thorough, I decided to see how I might benefit from purchasing gift cards instead and purchasing the camera on  The camera retails on for just under $700 and I was able to purchase $700 worth of gift cards for just over 100,000 points, a nice discount.

I had no trouble adding each card to my account (9 cards total) for a credit, and then purchasing the camera using that credit.  Since I buy so much stuff every week/month/year from, having an gift card is about the same as cash for me, very convenient.

Interestingly enough, if I wanted to change my reward points into actual cash, none of the major gift card secondary marketplaces will buy gift cards.   But my rewards program offers many types of gift cards and it is easy to find one that can be sold.  For instance, a Toys “R” Us gift card can be sold for about 80 cents on the dollar.  In my case, getting gift cards is a better value because I will actually use them very quickly.

One other note:  I might have been discouraged from buying too many gift cards from my rewards program as the selector that allows me to chose the number of a given gift card denomination was limited to a maximum of five.  However, after having purchased the maximum amount allowed, I was able to go back a few days later and purchase five more of the same denomination.

Bulk purchasing of gift cards is a common activity for businesses, to use for rewarding outstanding employees and for en-mass holiday employee gifts.  Despite my frequent rant that gift cards, if misused, can be quite the thoughtless gift, I do think there are good reasons companies can use them to reward employees.

But it might come as no surprise that very few retailers offer discounts on bulk gift-card purchases.  Whether you buy $100 worth or $5,000 worth, you will likely pay full price.

However, one of the gift card secondary marketplaces, GiftCardRescue, is now offering some bulk discounts on gift card purchases.  You have to contact them to get information about what types of cards are available with bulk discounts, and from the sound of the press release, they may not always be available.

To date I have not seen any other secondary marketplaces offer these type of discounts.

Here is an interesting ruling that finds that state gift card laws do not apply to airline gift certificates.  Specifically, the court found that California’s law against gift cards with expiration did not apply to an airline gift certificate that had a one year expiration date.

Div. Four agreed with Los Angeles Superior Court Judge Anthony Mohr that the Airline Deregulation Act, which bars states from regulating “a price, route or service of an air carrier,” takes precedence over Civil Code Sec. 1749.5.

Airlines seem to have an interesting exemption here.

The class distinction between gift certificates and gift cards goes further.  Under the new federal laws, gift certificates issued in only paper are exempt, but actual gift cards would be covered under the federal laws.   In plain language, the new federal laws don’t apply to paper gift certificates at all.

From the airlines perspective, they clearly treat gift certificates as second class citizens as well.  In the past, my experience on several airlines has been that these certificates can only be used at the ticket counter at the airline, and typically can not be used more than one at a time, making them incredibly tedious to use up.  So when an airline offers to give you four $25 gift certificates for your troubles, ask for a gift card instead.

We’ve again updated our gift card resources page, which lists every gift card secondary marketplace we’ve ever seen, and a few more sites have hit the dead pool.

Mercardi:  They’ve closed their doors and a message on their site recommends people go to Plastic Jungle.

Update:  They may have endorsed Plastic Jungle as their successor, but that hasn’t stopped competitor from offering a 5% discount to Mercardi users, or anyone who uses the code MERCARDI until Friday 9/3.  I’ve never quite understood the penny-auction phenomenon, where people pay to bid on items by buying credits, which are lost if they don’t have the winning bid.  To assuage the frustrations of many of their customers, most penny-auction sites started allowing people to apply credits spent on an auction to buying the item at full retail price.  According to a Business Week article, this practice has sliced the margins considerably making it a much less profitable business, and customers otherwise have cooled to the type of marketplace as traffic at the three largest penny auction sites are down 40-60% in the first half of this year.  It was bound to happen and I suspect customers have wizened up.  In any event, this gift card focused penny-auction site appears to be dead.

The Island of Misfit Gift Cards:  AKA  One of the many sites of questionable value, it simply listed gift card auctions on Ebay.  Apparently even their low overhead wasn’t enough to keep them in business.

Open-loop (Visa, MasterCard, American Express, Discover) gift cards can be very difficult to use successfully.  In my last post, I discussed how some of their limitations and how to best use them for online purchases.  In this post, I’ll discuss how to best use them for in-person purchases at retail establishment.

If you have a particular retailer in mind to use a gift card at, whether for yourself or someone else, closed-loop gift cards (Target, Wal-Mart) might be a better choice as virtually none of the open-loop gift card issues (like fees and verification) exist for closed-loop cards, and they are often available at a discount.

In-person purchases

Using these cards in-person can be tricky in many situations.  First, be aware that purchases at restaurants and gas stations are treated differently than most other purchases.

When you want to buy gas at the pump at a gas station, the gas station will automatically put a $50 or $75 hold on your card before you pump gas.  If your card does not have enough for the hold on it, you are out of luck, and won’t be able to use the card at the pump.  You may be able to present the card to the cashier, explain the situation, and pump gas as you would with a cash purchase.  However, be prepared to cover the purchase with cash if it doesn’t work, especially if you tried it at the pump first, because of authorization holds as we explained in part 1 of this series.

You may also run into problems using gift cards that have not been registered at gas stations, and specifically at the pump, because the majority of gas stations now require you enter your billing zip code.  If you plan to use your gift card at a gas station, and have considered the $50/$75 hold issue, register your card first and use the zip code of the address you registered.

When you want to pay for a meal at a restaurant, most restaurants point-of-sale (POS) systems will automatically place a hold on the amount of your bill, plus an additional 20% to make sure you have enough available credit (or funds in the case of debit cards) for a tip.  If you want to pay for a $50 meal with a $50 gift card, and pay the tip in cash, you are out of luck as the card will be rejected as the system will attempt to authorize it for $60.  You could always ask the server to put $35 of a larger bill on a $50 gift card and then fill in the rest as part of the tip.

Other than gas stations and restaurants, most other merchants should have few problems with open-loop gift cards as long as you are aware of your balance, are sure there are no holds on your funds (from failed purchase attempts that have not cleared) and are not trying to purchase using a split-tender transaction, a special kind of gift card problem.

When you use a closed-loop gift card (like Target), almost all retailers POS systems are capable of (a) checking the balance on the card, and (b) applying the remaining balance on the card to your purchase and then applying another type of payment to the remainder.  This is called a split-tender transaction.

However, with open-loop gift cards, merchants are not able to check your remaining balance (except in a few rare cases) and most cashiers have not been properly trained in split-tender transactions, if the POS system is even capable of doing one.  That is the main reason that open-loop gift cards are so frustrating, because getting the last few bucks off of the card is very difficult.  I have yet to find a retailer, online or brick-and-mortar that says they support split-tender transactions.

MasterCard and Discover have recently introduced new merchant requirements that will solve many of these problem, like holds, balance checking, and split-tender transactions, but it will be a year or more before those fully take effect.

This post by originally appeared in the Plastic Jungle Blog.

Just a reminder, the new gift card rules authorized by the Credit Card Reform Act of 2009 and finalized by the Federal Reserve earlier this year take effect today, August 22nd.  An important exception though is that open-loop (Visa, MasterCard) gift cards requirement to have more informative packaging has been delayed until 2011, to give vendors more time to purge current inventory.

Here is a summary of the new Federal rules:

The final rule amends Regulation E to implement the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act). The final rule sets forth new protections for consumers that purchase or use gift cards. These protections apply to all gift cards sold on or after August 22, 2010.

Products covered:  The final rule applies to gift certificates, store gift cards, and general-use prepaid cards, as those terms are defined in the Credit CARD Act.

  • Covered products include retail gift cards, which can be used to buy goods or services at a single merchant or affiliated group of merchants, and network-branded gift cards, which are redeemable at any merchant that accepts the card brand.
  • Consistent with the statute, the final rule does not apply to other types of prepaid cards, including reloadable prepaid cards that are not marketed or labeled as a gift card or gift certificate, and prepaid cards received through a loyalty, award or promotional program.

Restrictions on dormancy, inactivity, or service fees:  The final rule restricts dormancy, inactivity, or service fees with respect to a gift certificate, store gift card, or general-use prepaid card.

  • Dormancy, inactivity, and service fees may only be assessed for a certificate or card if: (1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees.
  • Fees subject to the restrictions would include monthly maintenance or service fees, balance inquiry fees, and transaction-based fees, such as reload fees, ATM fees, and point-of-sale fees.

Restrictions on expiration dates:  The final rule prohibits the sale or issuance of a gift certificate, store gift card, or general-use prepaid card that has an expiration date of less than five years after the date a certificate or card is issued or the date funds are last loaded.

  • The expiration date restrictions apply to a consumer’s funds, and not to the certificate or card itself. The final rule also includes provisions intended to give consumers a reasonable opportunity to purchase a certificate or card with at least five years before the certificate or card expiration date.
  • The final rule prohibits any fees for replacing an expired certificate or card, or for refunding the remaining balance, if the underlying funds remain valid.

A good summary of state laws for gift cards from Consumer’s Union can be found here.

Open-loop (Visa, MasterCard, American Express, Discover) gift cards, while not tied to a particular merchant, can be very difficult to use successfully.  In this post, I’ll discuss how to best use them for online purchases.  In my next post, I’ll cover simple rules for using them at a merchant in-person.

If you have a particular retailer in mind to use a gift card at, whether for yourself or someone else, closed-loop gift cards (Target, Wal-Mart) might be a better choice as virtually none of the open-loop gift card issues (like fees and verification) exist for closed-loop cards, and they are often available at a discount.

Online purchases

These cards in most ways look electronically just like credit cards, and most people want and expect them to behave just like credit cards.

When you try to use a card for an online purchases, whether it is a credit card or an open-loop gift card, you will be asked to enter the billing address for the card, which is used for the address verification system (AVS) where the numbers associated with the address you give (house number on street and zip code) are compared with what is on file for the card.

Some gift cards simply ignore AVS, which means that the issuing bank sends the merchant an AVS code that says AVS is not being used.  Here is where the trouble starts.  Most merchants will see this as an address verification pass, but some will see it as a fail, and the transaction will be declined.

Some gift cards do not ignore AVS, which means that until you go to the website listed on the card and register it to an address, the AVS check will always come back as a fail.  There is no way to tell what cards behave in which ways, and in some cases cards issued by the same bank that look exactly the same will behave differently in this respect.

So you just tried to use your card which you had not registered, and it failed because the address verification failed.  Guess what?  Now your card has a hold on it for the amount you tried to purchase.  These holds will typically last for more than a week and up to three weeks!

If you plan to use a card online, unless you know that it is the type that does not use address verification, always register your card to the address you plan to have stuff shipped to, before you use it.  It may also help to test the card out with a small purchase (so it doesn’t put your entire card value on hold) before you make a larger purchase.

MasterCard and Discover have recently introduced new merchant requirements that will at least help by significantly reducing the length of time your funds are on hold after a failed transaction, but it will be a year or more before those fully take effect.

In my next post, I’ll discuss using open-loop cards in-person.

This post by originally appeared in the Plastic Jungle Blog.

A recent LA Times consumer advocate column states that a customer was upset when he found out that Target charged him a $4 activation fee.  When I tried to verify this by going through the purchasing process with Target online, I was not charged an activation fee, but only a $1.95 shipping and handling fee, a cost that seems reasonable.

Is Target charging an activation fee for its gift cards purchased in-store?  Why?

One of the oldest and most successful gift card scams is called gift card cloning.  To clone a gift card, thieves grab the information from unactivated gift cards on store shelves, duplicate the cards using a magnetic card reader/writer, and wait for the cards to be activated.  Once activated, they spend the gift cards before the purchaser does.

Gift card cloning is a serious problem any time gift cards on display at stores are easily accessible by customers.  We recommend that you don’t buy gift cards that are on display where anyone can get to them.

One of the best descriptions I have seen of the entire process can be found in a recent article on a thief who got caught recently.

BEAVERTON – Sealtiel Chacon Zepeda was standing at a Fred Meyer sales register spending a gift card when curiosity struck.

He wondered how gift cards worked, how the little magnetic strip on the back of them turned cash into store credit and how easily he could reproduce the information stored on the card.

His questions, answered by 20 hours of Internet research, sparked an idea that led to Zepeda stealing $6,000 at local stores, rending numerous customers unable to use their gift cards.

The idea: cloning gift cards.

Zepeda, 22, who pleaded guilty last week in Washington County Circuit Court to five counts of computer crime, used a system that Beaverton Police Detective Michael Hanada said law enforcement nationally had hardly seen in early 2009, when Zepeda was scamming retailers, and local police haven’t seen since.

Zepeda cloned gift cards that others had purchased using a computer program he found online and the swipe of a card through a magnetic card reader that was also capable of rewriting the card’s information.

“This is the first time I’ve ever seen it,” Hanada said. “This was really unique.”

The case began in January 2009 when local Fred Meyer stores started receiving complaints from customers who came in to redeem gift cards only to find their cards had a zero balance.

Many stores, including Fred Meyer, offer a service for customers to check the balance on their gift cards online or over the phone by entering in the gift card’s number. Fred Meyer Stores’ fraud investigators detected that the cards had been tampered with when they saw that each card racked up hundreds of balance inquiries a day.

Read more …

First Data released its First Half Gift Card Payments Report, which, not surprisingly reports on gift card sales for the first half of 2010.

At quick-service restaurants, the dollar value of gift cards jumped 14.0 percent and the number of gift cards sold rose 12.4 percent in the first six months of 2010, compared with the same period last year. The average gift card amount at quick-service restaurants increased 1.4 percent to $13.45, First Data found.

Gift card reloads grew significantly at quick-service restaurants, according to the company’s study. The dollar value of reloads rose 47 percent at quick-service concepts, compared with an increase of 25 percent across all merchants.

At casual-dining restaurants, the dollar value of the gift cards sold rose 4.7 percent and the number of gift cards sold increased 6.1 percent. However, the average gift card amount slipped 1.2 percent to $28.54.

The dollar value of all gift cards sold in the first half of the year, including at retailers, increased 4.6 percent, while the number of gift cards sold rose 2.7 percent, First Data found. The average gift card at amount at all merchants increased 1.9 percent to $33.73.

It looks like the gift card industry finally has some good news.  Although this is a far cry from the 15% year over year growth the industry saw prior to the recession, it builds on a strong 2009 Holiday season for gift cards.

AT&T and Verizon, Deutsche Telekon and T-mobile are working with Discover to create an alternative payment network to Visa and MasterCard that uses smart-phones instead of credit and debit cards for payment.  Could this also be the future of gift cards?

A payment system like this has been talked about in the US since the early days of the Internet and places like Japan and Korea have healthy mobile-phone payment services, but nothing has ever gained traction here.

It is not hard to imagine that such a system could easily handle gift card transactions as well as credit and debit transactions.  The chief benefits would be:

Benefits to merchants: Lower cost of issuing cards as everything is electronic; no actual printed card to produce

Benefits to consumers: You will always have your card with you, as long as you have your phone, which is probably most of the time for most people.

Benefits to everyone: less of a chance of the type of fraud that occurs when gift cards are on display and easily accessible.

However, until such a system is ubiquitous, merchants would have to support both the newer electronic system and traditional gift cards, probably increasing costs of gift card programs in the short term.

I recently came across the Gift Card Trader iPhone app, on sale for $4.99 in the iTunes app store.

They are more like a Craigslist for gift cards than a true secondary marketplace, like Plastic Jungle or Gift Card Rescue.  The GiftCard Trader app allows anyone to list their gift card for sale, along with an address the transaction can be done in person.  Buyers can search for a gift card that is located for sale near them.  The idea is that, you are about to go shopping at Home Depot and you check to see if you can pick up a heavily discounted Home Depot gift card on the way there.

There are a number of problems with this business model:

  1. As I’ve mentioned a number of times, Craigslist is simply not a safe place to buy and sell gift cards; there is too high a likelihood of fraud and/or robbery if the value of the card is high enough.  In this sense, GiftCard Trader is no better.
  2. I seriously doubt that people will want to pay a fee for an app like this when there are so many good services already, some of which are bound to come out with iPhone/Android/Blackberry apps in the near future, that will be free and tied to a much safer way to transact.
  3. As with most new gift card secondary marketplaces, there were ZERO available gift cards in my area, and I am surrounded by about 5 million people.
  4. I just wrote about a new type of scam involving the scalping of gift cards in front of stores.  Because there is no way to verify the amount on a gift card at the moment you are purchasing it, you could easily pay $100 for a $0 value gift card.  This model just isn’t safe.

I like the novelty of the idea, and the app appears to be simple and well-written, but the premise behind it has some serious problems.

A few times in my life I’ve bought tickets for an event, such as a concert or baseball game, from a scalper in the vicinity of the event itself.  The results have been mixed; sometimes the tickets are what they say the are, sometimes not, but I went into them with the full knowledge that I might not get exactly what was being offered.

If someone offers to sell you a Home Depot gift card at a steep discount, right in front of Home Depot, you might be suspicious and with good reason, as this report of just such a scam relates.  There is simply no way to tell on the spot whether a gift card has any value on it whatsoever. In this sense a gift card is much easier to fake than an event ticket.

Many of the scams involving gift cards are due to people doing what common sense would dictate otherwise.  It’s definitely not a good idea to buy a gift card from some random person on the street, or on Craigslist.  Ebay at least has some buyer protections (through PayPal).  You best bet if you want to buy discounted gift cards is to use one of the secondary marketplaces we’ve listed on our resources page.

An often overlooked positive feature of an open-loop gift card is that it has limited funds, and when used for online, or even offline, purchases, limits your exposure to fraud or other undesirable consequences.

One very common such undesirable consequence are free trial subscriptions that convert into a recurring paid billing after the free trial period, typically 30 days.  We often forget to cancel the subscription before the first billing happens, and companies know this, which is why they structure trial offers this way.

For instance, I recently tried out GoToMyPC, which offered a 30 day free trial, but required me to enter a credit card number for monthly billing after the 30 day trial period.  By using a gift card with a balance sufficient to pass their authorization (one months billing) and then spending the balance on the card, I’ve insured that I won’t be billed excessively for something I just wanted to try out.  Even if I forget to spend the balance on the card in time, I’ve limited my loss potential to the balance on the gift card.

By design, it is impossible to tell a gift card from a credit card, so as long as your gift card passes authorization (a process which we will discuss in an upcoming series on using gift cards for online and offline purchases), the company has no way of knowing that you are protecting yourself with a limited funds card.

I’ve often criticized gift cards as being impersonal and not always an appropriate gift and was ever so reminded of this when I came across a gift card promotional ad recently:

Visa Gift Cards make great anniversary gifts because they can be used in millions of places around the world. Give an anniversary gift card so the happy couple can use it to celebrate! Or buy a gift card for your husband or wife to celebrate your anniversary in style.

Choose from our anniversary gift card designs or opt to upload a picture and create your own personalized gift card for a unique gift.

Now, a suggestion to give a gift card to your wife as an anniversary gift is, to say kindly, a bad one.  I know my wife would seriously frown on such an impersonal gift for one of the most personal of occasions.  Plus, she knows that my money is our money (her money) anyways and giving her a gift card would be about the same as wrapping up something around the house as an anniversary gift.

Not a good idea.

On the other hand, the best occasion I can think of to give someone a gift card is to a couple that has just had a baby.  In particular, we have taken to giving a gift card or gift certificate to a restaurant delivery outfit that delivers from multiple local area restaurants.  Most areas have them.

If you’ve had kids, you know that the first few weeks are a little hard after a baby is born, especially for the first baby, and cooking a good meal is not always possible.  While it is nice the people often bring over meals to the new parents, sometimes it is nice to be able to pick up the phone and order something.

The following is a guest post written by Judd Lillestrand, founder of ScripSmart, a website dedicated to simplifying gift cards. In it, he offers tips for merchants selling gift cards. The views expressed are his own.

We do a lot of research on gift cards at ScripSmart. When adding a new gift card to the site for scoring, our first stop for information on the program is the the merchant’s website. Surprisingly, the range of information disclosed varies greatly from merchant to merchant. Here’s a list of 10 points we’d like to see every business who sells gift cards disclose:

  1. Gift Card Terms – A dedicated webpage to communicate the current terms and conditions of the gift card program. The Terms should cover many of the points listed below. See Target’s Gift Card Terms for a good example of a simple, yet comprehensive Terms webpage and Apple’s iTunes Gift Card Terms for a more lengthy version.
  2. Prominently Discloses Fees and Expiration – And if there are no fees or expiration dates, use it as a selling point by touting the ‘No fee, No Expiration’ on the same page where customers can buy the gift card. I see companies miss this opportunity a lot and it’s a  simple fix. If you are selling a gift card with fees or an expiration date, let people know about it up front; it will save you a negative customer experience down the road.
  3. Gift Card FAQ – Dedicate a webpage with common questions people ask about the program. This is often similar to the Terms webpage, but written in a consumer friendly manner. See Disney’s Gift Card FAQ for a good example. A good FAQ can save your company a lot of time and help make the potential customer feel comfortable with the purchase.
  4. Balance Inquiry – What are the options for checking the balance: phone, online, in-store? Don’t just refer to the back of the card for more details, such as the phone number.
  5. Replacement Policy – If a gift card goes missing, is it replaceable? If so, what does the gift card holder need for a replacement? Include contact information for the group responsible for managing such requests.
  6. Usage Restrictions – Are there any restrictions for use? If so, disclose them all. Some examples we see: accepted at participating  locations, not valid for shipping, not valid for payment on a charge account, not accepted in-store, and so on.
  7. Return Policy – Can gift cards be refunded for cash? Also, if an order paid for with a gift card is returned, how is the money transferred to the customer? For example: back on the original gift card, store credit, or cash refund.
  8. Also Redeemable At – Is the gift card redeemable at sister brands? If so, let customer know about it and position it as a selling point.  TJ Max, I’m looking at you.
  9. Required For Redemption – Is anything else required for completing a purchase with a gift card. For example, the  Gift Card requires a valid credit card to complete the purchase even if the balance of your gift card coves the order total.
  10. Card Issuer – What legal entity issues the gift card and what state is the company incorporated under?

Being upfront with your customers will pay dividends in the long run. If you believe disclosing information about the program will hamper gift card sales, it’s time to consider changing the program to make it more appealing for your customers.

I did a post the other day on bogus gift card websites and how to spot them.  Today I was presented with another humorous example of one of these type of bogus websites which may be as benign as trying to capture eyeballs for ads or direct traffic to other affiliated sites, or could possibly contain malware or link through to out-and-out scams.  Take a look:

Notice anything peculiar?  Last I checked, paying more than face value for something wasn’t actually a deal.  I think the algorithm used to create the site (and probably many like it) clearly has flaws.

Best Buy sure doesn’t get open-loop gift cards. It is one thing to make a single horrendous mistake and have someone arrested when they are simply trying to use valid American Express gift cards.  But hearing another story like the following one makes me think that Best Buy simply isn’t the place to use any open-loop gift cards.

I bought a Wii Fit Plus and a Wii set using gift cards I received for my birthday.  These are American Express and Visa Gift Cards.  When the cashier took the gift cards, he never returned them to me.  I didn’t think that was not normal since I rarely use gift cards.

Well, I decided that the Wii and Wii Fit Plus set was not for me so I returned it (unopened, in mint condition – after only a few days).  This is what I got from the folks at customer service.

“We can only refund American Express Gift Cards directly to the Gift Card itself.  The sales person shouldn’t have taken it from you.  Since you don’t have the Gift Card anymore, we can only issue a BEST BUY Store Credit! And if you use Visa or Mastercard Gift Cards, you can only get a store credit regardless.

Now, that was not my issue.  The issue that they cannot refund me the value in cash for gift cards is absurd, specially if their own salesperson took it from me.  I was very disappointed.