How Companies Treat Gift Cards Like Cash—And Why That's Bad For Shoppers

Where's the $100 Robert Ebberson just deposited into his Target account? It's gone and no one will help him retrieve it. Will he have to eat the loss?

Question:

Earlier this year, I bought a $100 Target gift card through GiftCards.com. I saved it to my Target account online.

Within a couple of days, the card was marked "redeemed" and its value reduced to $0. I did not use the card for a purchase, or for any other reason. I asked Target to help me find the missing money.

Target has told me it would not replace the card because it was offered through Giftcards.com. I realize Target would like to absolve itself of any responsibility for it, but it was accepted to my Target account.

Target has relieved me of $100. I am simply seeking an explanation and hope you can help.

-- Robert Ebberson, Boyds, Maryland

Answer:

I can tell you what happened, but you're probably not going to like my explanation.

Although you purchased the card through GiftCards.com and redeemed it at Target.com, your purchase was a special offer through a company called Saveya. It's an online marketplace where you can buy and sell discounted gift cards.

I only mention Saveya because its terms apply to the purchase of your card. Target referred your complaint to GiftCards.com. But GiftCards.com punted the complaint to Saveya. So what did Saveya say? The company is no longer working with GiftCards.com, so there's nothing it can do to help.

And around and around we go.

Who has your money? It could be Saveya, but if it is, the company says it wouldn't know. The promotion you took advantage of has ended.

"We’re unfortunately unable to do anything regarding our old partner orders that were placed through GiftCards.com," says Eric Turcovski, a Saveya spokesman. "There is not a way for us to credit the order back as it was placed through GiftCards.com."

Read: Should Dell Honor an 'Implied Warranty' on a Lemon PC?

The money could be with GiftCards.com, but the company insists that even if it did, it wouldn't be responsible, since you were working with Saveya. And Target is simply blowing you off without offering a valid reason.

You could appeal this to someone higher up the food chain at Target. I list their names, numbers and email addresses on my consumer advocacy site. If nothing else, this is a cautionary tale about gift cards. Companies treat them like cash, and when they're gone, they're gone. They don't really seem to care who used the money.

I'm also troubled by the number of companies that touched this transaction, which suggests gift cards have become a complex and inefficient payment method with lots of potential for shenanigans. Next time, I would consider simply using cash or a debit card to pay for your merchandise.

I contacted Target, GiftCards.com, and Saveya.com several times on your behalf. A Saveya representative suggested you might have been protected if you'd filed a claim within 60 days of your purchase, as outlined in its terms.

GiftCards.com offered you a $50 Visa card as a goodwill gesture.

Christopher Elliott is Money's reader advocate. Email him at chris@elliott.org or get help with your problem at his consumer advocacy site.