Gift Cards

Gift cards retain their spot at the top of the list among gift recipients. According to a survey by the National Retail Federation, 55.2% of adults would like to receive a gift card this holiday season. This makes them more popular than books, clothing, DVDs or electronics. *

Frequently Asked Questions

1. What Terms and Conditions might apply to the card I want to buy?
2. What is dormancy?
3. My card has an expiration date – what does this mean?
4. What can I do with an expired gift card?
5. My card has a “valid through” date – what does that mean?
6. What other terms and conditions should I know about?
7. Do all gift cards have expirations and fees?
8. What should I keep in mind if I want to buy a gift card for a friend or relative?
9. Why is it a good idea to buy a gift card directly from a store or from its online site?
10. What precautions should I take if I buy a gift card at a store?
11. Are there any other tips about buying a gift card from a store?
12. Are there any suggestions on choosing a gift card for an acquaintance?
13. Is there anything else I should be aware of if I buy a gift card from a credit card company?
14. What can I do to give the recipient more choices and fewer fees?
15. Can I purchase gift cards online?
16. What about those online sites which offer gift cards at a discount?
17. Can I use gift cards online? How?
18. Can gift cards be returned?
19. How do I return something I purchased with a gift card?
20. My gift card is from a store that is now bankrupt or has gone out of business. What can I do?
21. Where can I find the New York State laws pertaining to gift cards?
22. Whom can I complain to about unfair gift card terms?

1. What Terms and Conditions might apply to the card I want to buy?

   • You might be charged a service fee when buying a card.
   • You might be charged a “dormancy” fee if you do not use the card within a certain period of time.
   • You might be charged if you call to check on the balance remaining on your card.
   • If you lose your card and want to replace it, you may have to provide the seller with certain information, and you may have to pay a replacement fee.
   • The card might expire and no longer be accepted after a certain period of time.
   • If you have a balance left on a card after making a purchase, you may have to use that balance toward another purchase, rather than get cash back.
   • The card might not be able to be used as partial payment, in combination with another payment method.
   • You might not be able to purchase certain things at the retailer with your card, or you may have to spend a minimum amount in order to use the card.

   While these are among the most common terms and conditions, there may be others.

2. What is dormancy?

   A card that has not been used for a period of time is said to be “dormant”. If a card is dormant for an extended time period and still holds value, you may be charged a fee every month the card is not used, until there is no more value left on the card.

   In New York State, you cannot be charged a dormancy fee for at least one year, regardless of whether you have used the card or not. Also, in New York, fees cannot be charged retroactively. Federal law restricting fees on cards for 12 months after the last use of a card issued by credit cards and other federally regulated card issuers will be effective starting in August 2010.

3. My card has an expiration date – what does this mean?

   If a card “expires,” it can no longer be used and the purchasing power remaining on the card disappears. While some cards do not expire, others may expire from 1–5 years after they are purchased. It is a good idea to know if a card has an expiration date, and to use it before that date. When the federal Credit CARD Act of 2009 goes into effect in August 2010, cards covered by it will not be allowed to expire before 5 years. Additionally, there is a growing trend among national retailers to eliminate expiration dates.

4. What can I do with an expired gift card?

   Contact customer services of the company/store that issued the card and ask them to restore the balance or give you a cash refund. Many companies recognize that good customer service is imperative to continuing business operations, and will honor this request.

5. My card has a “valid through” date – what does that mean?

   Check to see if your card has a “valid through” date. This is not an expiration date, but you may have to contact the issuing company to trade your card in for a new card before you can use it. The reason for this is that the magnetic strip on the original card may no longer be readable.

6. What other terms and conditions should I know about?

   Some gift cards may be used to make online purchases, but cannot be used in a store. If this type of exception exists, make sure you think about the recipient, and how comfortable he or she is with making purchases online.

7. Do all gift cards have expirations and fees?

   No. Consumer awareness prompted a number of retailers to eliminate expiration dates and fees. Charts listing several popular retailers and comparing their gift card terms and conditions can be found here http://www.creditcards.com/credit-card-news/gift-card-comparison-table-09-1271.php and here http://www.bankrate.com/finance/credit-cards/2009-gift-card-study-results.aspx.

8. What should I keep in mind if I want to buy a gift card for a friend or relative?

   For many of us who run out of ideas for gifts, or would like to help a friend purchase a big-ticket item, gift cards are a great solution. Gift givers usually know the stores that recipients enjoy, based on the products the person uses including personal care products, clothing, sport or entertainment accessories and household goods.

9. Why is it a good idea to buy a gift card directly from a store or from its online site?

   If the person likes to shop at a specific store, it’s a good idea to buy the gift card directly from the store, either in person or online, rather than from an online auction site that offers discounts on these cards. Why? Because there have been scams involving gift cards auctioned on public auction sites, and the cards for sale may be stolen or counterfeit. Some online gift card sale websites have implemented security measures. These measures add layers of protection for consumers, who should check for them before initiating a transaction.

10. What precautions should I take if I buy a gift card at a store?

    When purchasing from a display rack in a grocery or department store, make sure the packaging containing the card has not been tampered with. A tampered package may indicate that someone stole the PIN number and bar code, which can be used to purchase goods online after checking to see if the card is activated.

11. Are there any other tips about buying a gift card from a store?

    Fraud and scams aside, a gift card giver should try to gauge if the card will be used within a year. Try to buy cards from a retailer that the recipient goes to often enough to use the card within the first year, before fees begin to affect the card’s value.

12. Are there any suggestions on choosing a gift card for an acquaintance?

    Some of us are lucky enough to know exactly what stores are frequented by the recipients of our gift cards. But some times it is hard to know where the recipient might like to shop. If you are choosing a gift card for that distant relative, the mailman or a work colleague, there are some things to consider.

    Gift cards with a credit card logo can be widely used, and may offer the recipient a greater choice of where he or she uses it. But beware: such cards often charge both purchasing fees and monthly fees. Since these cards are subject to federal law, not New York State law, monthly fees can be charged even during the first 12 months after purchase, until August 2010 when the enactment of the Credit CARD Act of 2009 starts prohibiting inactivity fees within the first 12 months of inactivity.

13. Is there anything else I should be aware of if I buy a gift card from a credit card company?

    A warning to recipients: beware of using gift cards from major credit card companies at gas stations or anywhere else that might put a hold on the credit. This might freeze the entire amount of the card for a time, depending on the balance.

14. What can I do to give the recipient more choices and fewer fees?

    A number of shopping malls now offer a general card that can be used almost anywhere in the mall. However, it is possible that the card will not be honored by some restaurants in the mall.

15. Can I purchase gift cards online?

    Yes. Several retailers offer gift cards or store credit for sale on their web pages. Again, check the terms and conditions of the cards, since some can only be used either in the store or online. Purchasing cards directly from the retailer is the safest route.

16. What about those online sites which offer gift cards at a discount?

    Websites specializing in gift card sales often sell cards at a discount value. They are able to do this in a variety of ways. Commonly, the website might buy gift cards in bulk, which allows them to earn a discount. Other sites allow registered users on the site to sell their own cards.

    While many sites take precautions to protect the consumer, there are still risks. For example, consumers risk purchasing stolen cards and the cards may be de-activated by the time the recipients use them. The cards may also have the balance used before shipping, leaving the consumer with a worthless piece of plastic.

    To protect yourself from scams online, check to see if the site allows users to rate the listed gift card vendors and search out the vendors with better ratings. Some sites require gift card vendors to guarantee gift card balances using their own credit cards. Both measures provide added protection to the consumer.

17. Can I use gift cards online? How?

    A number of retailers allow consumers to use gift cards to pay for online purchases. This is usually done at the end of an online shopping session, during the checkout process. At that point, the consumer is asked to enter specific information from the card, such as a PIN or identification number on the back, near the bar code, often time.

    Consumers should always make sure the package containing any gift card is intact at the time of purchase. If the packaging has been tampered with, it may mean that the PIN numbers and bar codes have been stolen and the cards may be worthless.

18. Can gift cards be returned?

    You will need to ask at purchase. Each retailer can establish its own policy.

19. How do I return something I purchased with a gift card?

    If you wish to make a return of goods purchased with a card, you will need the receipt and the gift card used for purchase. Each store has its own policy regarding returns, and these are separate from the terms and conditions of the gift card. Ask about the return policy when purchasing the item if you are not sure about keeping your purchase. Limitations to the return policy must be posted at the store. Remember that any balance returned to a gift card may take a few business days before it can be used.

20. My gift card is from a store that is now bankrupt or has gone out of business. What can I do?

    When stores declare bankruptcy, gift card sales are usually suspended. Depending on various factors, the store either may be able to redeem gift cards “dollar for dollar” at a discounted value, or may not be able to redeem them at all. If you have a gift card from a store which has filed for bankruptcy, check with them to see what their policy is concerning their outstanding gift cards.

    If you bought these gift cards from a gift card vendor, you should contact that vendor. In some cases, gift card vendors will allow consumers to use gift cards for a bankrupt or closed store at another store or stores.

    If you purchased your gift cards with a credit card, contact the credit card company to see if you can get a refund.

21. Where can I find the New York State laws pertaining to gift cards?

    Currently, the New York State laws governing gift cards are the General Business Law section 396-I Chapter 170 and the Abandoned Property Law, Sections 103 and 1315. These can be found on http://public.leginfo.state.ny.us/menuf.cgi in the “Laws of New York” link under GBS (General Business) and ABP (Abandoned Property).

22. Whom can I complain to about unfair gift card terms?

    If you have a complaint about gift card policies, first contact the customer service department of the retailer.

    If you cannot resolve the complaint there, some authorities that may be able to help are:

    For cards issued by retailers:

    • New York State Attorney General – Consumer Helpline: (800) 771-7755. Consumers can access a wide range of consumer tips by visiting the website at: www.oag.state.ny.us. Other states’ Attorney Generals can be reached via www.naag.org.
    • New York State Consumer Protection Board – www.consumer.state.ny.us
    • Federal Trade Commission – www.ftc.gov or (877) FTC-HELP
    • Better Business Bureau – www.newyork.bbb.org. Other states’ Better Business Bureaus can be reached via www.bbb.org.
    • New York City Department of Consumer Affairs – The DCA urges New Yorkers to file complaints by calling 311 (or 212-NEW-YORK), the City’s 24-hour hotline, or online at www.NYC.gov/consumers.

    For cards issued by national banks:

    • Comptroller of the Currency (OCC) – Customer Assistance Group (800) 613-6743 or customer.assistance@occ.treas.gov. The OCC charters, regulates, and supervises national banks, some of which issue gift cards.

* Economy to Impact Two-Thirds of Families this Holiday Season, According to NRF Survey: http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=806

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