Gift cards are the quintessential easy gift idea. Everyone wears them and avoids questions like “Will it fit?” or “Will you like this?” Gift cards and gift certificates are available in all types of stores, from the most mundane such as supermarkets and pharmacies to more specialized businesses such as spas and travel agencies. However, no matter where you buy or receive a card, it is important to protect yourself as a consumer and to be familiar with your rights around the use of gift cards. After all, these are used as currency and should be treated with the same frugality that cash would be treated.
What can I do with a gift card that I don’t want?
There are many options for putting unwanted gift cards to good use. There are websites that exist for the sole purpose of buying and selling gift cards. Gift Card Granny, for example, will buy your card for 60% -80% of its value. You can also sell your card on a website like Craigslist or eBay. Other websites like the Gift Card Exchange allow you to exchange your gift card for one that you will actually use.
If you’re feeling charitable, many nonprofits, including local schools and churches, will accept gift cards as donations. Gift cards are also great for re-gifting. There is no reason to let a gift card be forgotten!
Can my gift card expire? Can I lose my gift card balance?
The short answer: it depends on the state you live in.
The long answer: It depends on the state you live in and the degree to which your state is complying with federal law.
In 2009, the Credit Card Liability Disclosure and Accountability Act (CARD) [gpo.gov/fdsys/pkg/PLAW-111publ24/pdf/PLAW-111publ24.pdf] passed into federal law. The law covers a lot of ground around protecting credit card holders, but it also created some federal standards for gift card issuers that are meant to protect consumers. These include requiring that cards, with some exceptions, expire no less than five years after issuance and that inactivity fees can only be collected after one year of inactivity and only if these fees are fully disclosed to consumers. According to the CARD Act, stores can start charging inactivity fees, that is, a charge to keep the card active when it has not been used after a certain period of time, after a year of inactivity, and no more of one charge per month. Eventually, these charges can deplete the value of the card. This is an important way that stores and major card issuers like American Express make money. However, some states have introduced additional, and sometimes contradictory, legislation surrounding the gift card law.
For example, New York law allows stores to begin charging monthly inactivity fees after just one year of inactivity. It is also legal for stores to charge a replacement fee for lost cards, and they do not require stores to return cash for small balances on the cards. Also, after five years, the cards are considered “abandoned” and the state loses the balance on the card. Other states, like New Jersey, establish abandonment after just two years of inactivity. (In the case of New Jersey, this policy has been deemed unconstitutional, so the state continues to switch between applying the overridden state rule and the federal rule.) Such provisions, which eliminate profits for card sellers that come with unused cards, have caused major issuers like American Express to pull out of grocery and convenience stores in some states.
For comparison, California provides gift card users with protection beyond the federal standard. Cards can never expire, even after five years, and inactivity fees can only be charged after two years of inactivity and only if the card balance is less than $ 5.
Here you can find a good resource to find the laws specific to your state. Because not all states or card issuers comply with federal law, consumers should be aware when reading the terms of the card. In general, it’s smart to try to use up your cards as soon as possible to avoid forgetting about them and using the full balance on the card.
What if there is only a little money left on my card?
You may be able to get your balance in cash. Under the CARD Act, most businesses must provide cash for the remaining balance on a card if the balance is less than $ 5. (In some states, this minimum value is higher). Of course, companies often don’t train their front-line staff on this law, so you may need to climb the ranks to find someone who is truly knowledgeable about the law. .
What should I know about online gift cards?
Online “gift certificate” sites offering deals like Groupon and LivingSocial fall into a somewhat gray area of the law. They are generally treated as coupons rather than gift cards, which means that they can generally set their own terms when it comes to expiration dates and redemption policies. Groupon, for example, requires stores to honor the value a customer paid for an offer after the offer has expired, but only as store credit.
Virtual cards, such as the popular Amazon or iTunes cards that are often sent by email, do not usually expire. Sometimes they can only be redeemed online and not in physical stores, so read the card terms carefully. Otherwise, they are subject to the same laws as tangible cards; for example, Amazon includes required language to indicate that cash rebates are only available when “required by applicable state law,” although it does not provide information on how to claim small cash balances.