Take caution when purchasing iTunes Gift Cards

Those of you who know me know that I’m an aficionado of all things Apple. I’ve purchased five Macs and currently own three. I’ve purchased Apple software titles on numerous occasions–from dotMac to iLife and iWork upgrades to OS X upgrades to QuickTime to Final Cut. I’ve purchased numerous iPods and iPhones over the years–along with my wife and kids I currently own five iPods and two iPhones, and we buy and rent music, movies and TV shows from iTunes. That being said, I have to tell you that it gives me no pleasure to say that you should very carefully consider the following before purchasing iTunes Gift Cards. This post will likely be a bit rambling but hang with me, ok?

First and foremost, please understand that you should trust neither the Apple/iTunes brand nor the retailer selling the gift card.  Save your receipt! For, while the iTunes Gift Card system could have been created with safeguards to protect the consumer, it has not been. The problem lies in the fact that when you purchase an iTunes Gift Card it is worthless until the retailer transmits information to the iTunes Store indicating that the card has been properly purchased. This, apparently, is the point at which the retailer becomes liable to Apple for the cost of the gift card.

Understandably, Apple needs to verify that the card in question has been properly purchased and that they will be paid by the retailer. And don’t get me wrong, this is the case for any company issuing gift cards. I mean, if a shipment of gift cards was lost or stolen, the company issuing the cards doesn’t want someone to be able to make purchases with stolen cards: that’s easy to understand. The difference, however, is that most companies sell their gift cards only in their own stores, so the consumer can take comfort in the knowledge that the company’s own computer system has verified that the card is valid and that the card has been properly activated at the time of sale. When you purchase a Best Buy gift card, for instance, you can leave the store with a very high level of comfort that the person to whom you give the gift will have no trouble using it to pay for a purchase at Best Buy.

The problem with iTunes Gift Cards–at least with those purchased from third party retailers–is that the consumer cannot leave the third party retailer’s store with the same high level of comfort, for the consumer–who has already paid the third party retailer–is still at the mercy of the third party retailer to accurately report the sale to Apple. This problem is one that is readily apparent upon reflection, but probably isn’t readily apparent to most consumers at the time of purchase.

The solution, of course, is to save your receipt. But this very requirement removes most of the convenience factors in giving a gift card in the first place! If I have to save the receipt, then it’s not as good as cash, is it? But that’s exactly why people buy gift cards. Apple’s own web site refers to iTunes Gift Cards thustly:

Gift Cards.
Take the guess work out of gift-giving.
Give music, movies, and more with iTunes Gift Cards.

iTunes Gift Cards
Prepaid iTunes Gift Cards are available from the Apple Online Store, Apple Retail Stores, and thousands of other U.S. retailers in denominations of $15, $25, and $50. They’re good toward any purchase on the iTunes Store.

Now, I know that Apple isn’t in the business of advertising problems with their products or resellers, but the iTunes Gift Card didn’t exactly remove “the guess work” for me. In fact, if I have to save the receipt, isn’t that the same as explicitly telling me that there is, in fact, substantial “guess work” involved! And, in fact, the last two $25 iTunes Gift Cards that I purchased at one of the “thousands of other U.S. retailers” weren’t “good toward any purchase on the iTunes Store.”

Consequently, the last two iTunes Gift Cards that I purchased are the last iTunes Gift Cards that I will purchase, from any store.

My wife purchased two $25 iTunes Gift Cards for our kids, a couple days before Christmas. She was at the grocery store and it was an impulse buy–a last minute addition to the “stocking stuffers”. The next day, I plugged the receipt into Quicken, as is my practice, and shredded the receipt–I didn’t know she had purchased the iTunes Gift Cards, and truthfully, probably wouldn’t have saved the receipt if I had. Who saves a receipt from a grocery store? And yes, we save receipts when we buy the kids gifts, until the gift has been opened and we know it won’t need to be exchanged or returned, but a gift card is as good as cash, right? Certainly Apple wouldn’t put their name on a product or system that didn’t work well, MobileMe notwithstanding. Nor did the third party retailer mention, as they often do, that we should save the receipt in case of a problem with the gift cards.

Well, you may be thinking that Xmas was some time ago, and you’re right. The fact of the matter is that my son’s birthday is the week after Xmas and he received as a gift from a friend, another iTunes Gift Card that activated without problem via the iTunes Store. He happened to use that gift card first when making music purchases over the last weeks.

So, this past week we get around to redeeming the gift card that my wife had purchased and iTunes tells me this:

The Gift Certificate or Prepaid Card code you entered has not been activated. Please return to the original point of purchase for assistance.

Now, that’s odd, so I thought I’d better go ahead and check my daughters gift card: same message.

No problem, or so I thought, this must happen all the time. I had my wife return to the grocery store with the two iTunes Gift Cards and explain the situation to the Customer Service clerk. The clerk asked for her receipt and so she explained that it had been shredded several weeks earlier after I had entered it into Quicken, whereupon she was told that without a receipt the store had no way of knowing that the card had been purchased there. Which is when I realized that the third party retailer doesn’t pay Apple until the retailer sells the card, at which point the card should have been “activated” (by the retailer sending information to iTunes).

So, I contacted Apple and was told, understandably, that they have no way of identifying the card as having been sold to me by the third party retailer and suggesting that I have the retailer reprint a receipt. Well, it’s a grocery store: they tell me that they can’t reprint receipts. So, we’re screwed. And no, it’s not possible to go buy two other iTunes Gift Cards from the grocery store and then “return” these two as not being activated.

We’re screwed out of $50 and, for that matter, so is Apple.

Now, in all fairness, I don’t know that this same situation would be true if the iTunes Gift Cards had been purchased in an Apple Store or online in the iTunes store. I just don’t know. We’ve only purchased about four iTunes Gift Cards ever, having given them a couple times as gifts to friends of our kids for birthdays.

But this I do know: I won’t be buying any more iTunes Gift Cards. There is just too much “guess work” involved. And the one thing of which I’m convinced, is that this situation occurs far more often than either Apple or the third party retailer are willing to admit.