Gift cards have become a popular answer to the age-old question of what to get someone for that special
occasion. They’re a time saver for the buyer and they give the recipient a wide choice of gifts.
Changes in the law regarding the multi-billion dollar gift card industry brought about new regulations that you should know. One change prohibits gift card funds from expiring for at least five years from the date the card was purchased, or from the last date
any additional money was loaded onto it. If the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost. Additionally, retailers are not allowed to charge dormancy, inactivity, or service
fees unless a card hasn't been used for at least one year, and this fee can only be assessed once per month. The expiration date of a card must be clearly disclosed on the card and all associated fees must be clearly noted on the card or its packaging. You
may be charged a fee to buy the card or to replace a lost or stolen card.
Tips for buying gift cards
- Purchase gift cards from a trusted source. There are many online sites and businesses that offer gift cards that may be counterfeit or have already been redeemed.
Check out the retailer before making a purchase.
- Consider the stability of the establishment. If the company goes out of business or comes under new ownership before the card is redeemed, the value of the card may be lost.
- Check the terms and conditions of the card. Verify if there’s a fee to buy the card and whether any fees will be deducted from the card after purchase.
- Ask the retailer if you can obtain a replacement card, and the cost to do so, in case the card is lost or stolen. Some retailers will replace the card with the remaining funds if you can produce the original receipt.
- Inspect the card before you buy it to ensure that the protective stickers have not been removed and that the codes on the back of the card haven't been scratched off to reveal a PIN number. Also, consider purchasing a card that is kept away from public
view. One recent scam involves crooks jotting down card numbers then going online to begin their shopping spree once the card has been activated.
Tips for using gift cards
- Read the terms and conditions for using each card. Check for expiration dates or fees that may be assessed.
- Ask the person giving you the card for the original purchase receipt and keep it in a safe place in case you need it, such as when trying to replace a lost or stolen card.
- Keep track of your balance. Many issuers allow you to check the balance online and/or provide a phone number on the card to check the card balance.
- If you have a gift card for an establishment that has been bought out by another company, contact the new owner to see if they will honor the balance on the card.
Each state has laws and guidelines for gift card and certificates.
The National Conference of State Legislatures provides a list of these
statutes by state on their website. For more information on this topic, see Business Consumer Alliance’s
Resource Guide on Gift Certificates and Cards.