Notes On Consumer Affairs
Has this happened to you? Upon using a gift card or gift certificate you find that it has either expired or that its value has been reduced due to fees and surcharges. Many times, consumers are unaware of expiration dates and fees until redeeming the gift card or gift certificate. To better inform and protect consumers, I have sponsored two bills A.10333-B and A.10334-A. These bills have passed both houses and were approved by the Governor. These laws shall become effective on October 18, 2004. A. 10333-B, would prohibit monthly service fees prior to thirteen months of dormancy.
Dormancy is non-use of the gift card or gift certificate. This would allow the recipient at least one year to use the gift certificate without any monthly service fees. A.10334-A, would require a notice at the point of purchase stating that terms and conditions apply to gift cards and gift certificates.
The bills intent is to keep the consumer informed regarding terms and conditions and any limitations or requirements that may apply. Gift cards are increasing in popularity. The number of American consumers who purchased a gift card doubled from 2002 to 2003, and roughly 69.9% of consumers purchased gift cards during the 2003 holiday shopping season.
There are two kinds of gift cards: store -specific gift cards and general-purpose gift cards, also known as bank-issued gift cards. Store-specific cards can be used at the store that issued the card and often at that store’s website. However, certain stores do not allow gift cards to be used for online shopping, so it would be best to inquire before purchasing the card. Bank-issued gift cards can be purchased from credit card companies, banks, and malls. They often bear Visa, Master Card, American Express, or Discover logos, and the cards can be used at most locations that accept the corresponding credit cards. However, bank-issued gift cards are not usually protected by the same rules that protect credit and debit cards, and they are generally subject to more fees than store-specific gift cards. Bank-issued cards often differ from store-issued cards. Bank-issued cards may allow ATM access and replacement in case of loss, theft, or expiration, but there are often fees for each of these transactions.
When purchasing a gift certificate or a gift card, always be sure to ask whether it expires and when. Find out whether or not fees will be charged and whether or not these fees are on a specific schedule. Ask whether the gift certificate can be used for online purchasing and whether any other purchasing limitations exist.
Please be advised that policies regarding gift cards and gift certificates vary by the issuer, and that the issuer should be contacted for information regarding these policies. There are many different products available, each with different terms and conditions. Before purchasing a gift card or gift certificate, make sure you are fully informed, and pick the product that best suits your needs.