Gift cards or vouchers are a great way of buying just what you want. But don't let them sit around too long – you could lose out. Here's what you should be aware of.

Where can you use a gift card?

Usually you can use it only in a specific store or group of stores. Kiwibank’s Prezzy Card, which is like a debit card, can be used where Visa is accepted.

Will you get change?

Gift cards aren’t the same as cash. So traders don't have to give change if you choose goods less than the stated value (unless the terms and conditions state that change will be given). But you can use the card again if you haven’t redeemed the full amount.

Are there fees?

Most cards don’t have fees. However, there are exceptions. Kiwibank’s Prezzy Card costs $5.95 on top of the value of the card. There’s also a $20 fee for a replacement card, a $15 fee if you dispute a transaction and your complaint isn't upheld, and a 3.5 percent currency conversion fee if you make purchases offshore. If you want to talk to a Prezzy Card customer service rep, it costs $2.

If you buy a gift card online (rather than at the store) you may be charged postage.

Can you check your balance online?

Most cards let you do this. You use the card number, plus the pin found on the back of the card.

What should you do if the card has expired?

Retailers may offer a “grace period” after the expiry date. Ask the retailer if you can still use the card even though it’s expired. See Gift card expiry dates for more information.

What happens if the owner of the business changes?

Once a business changes hands, an unused gift card is probably worthless. The new owners are bound to honour it only if they’ve purchased the previous owner's liabilities, which doesn't happen often. But it doesn’t hurt to ask – they may decide to honour it.

What if the trader goes bust?

Your best bet is to register with the receiver as an “unsecured creditor”. If there’s any money left after the secured creditors have been paid, you could get something.

For cards bought through Epay’s “Gift Station”, the company says it allows consumers to transfer balances on to a different card if a retailer fails.

What are the alternatives to gift cards?

You could give cash – the government-issued gift card. Or you could just transfer money into the other person’s bank account.

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