DiNapoli: Gift Cards May Lose Their Face Value Over Time
State Comptroller Thomas P. DiNapoli today reminded consumers to spend the gift cards they received last holiday season and to ask appropriate questions when purchasing new gift cards. Not all gift card sellers have eliminated fees and expiration dates and some gift card sellers are beginning to charge purchase fees.
"Every dime counts for families during this holiday season," DiNapoli said. "Even though many retailers are no longer charging dormancy fees, consumers should continue to check the terms and conditions of all the gift cards they buy. And families should use gift cards promptly; no one wants to lose money on a gift."
Laws prohibiting gift card sellers from charging inactivity fees for the first 13 months after a gift card is purchased are in place in New York State for store and mall gift cards. These fees, if applicable, are set to start soon for gift cards that were purchased last holiday season and will eat away at the value of the cards. Federal legislation that will become effective next year will prohibit inactivity fees for a year after last use and prohibit expiration for 5 years from purchase.
"New York's retailers have led all other gift card sellers in ensuring that consumers get the most out of every gift card they buy or receive," said Retail Council of New York State President and CEO James R. Sherin. "Comptroller DiNapoli's advice to consumers -- know the terms and conditions of any gift card -- is especially important during this gift-giving season. We were proud to work with him several years ago to support the state's law requiring that disclosure, and applaud him today for alerting consumers to know they have choices when buying gift cards."
Gift cards still might come with terms and conditions that can decrease the value of the gift card. These include charging:
- a service fee when the card is purchased;
- a dormancy fee if the gift card is not used within a certain period of time;
- a fee to call and check the balance remaining on the card; and
- a replacement fee for lost or stolen gift cards. The bar code number and proof of purchase are needed to replace cards.
Gift cards may expire and no longer be accepted after a certain period of time. If an item costs more than the value of a card when a consumer makes a purchase, he or she may not be able to split payment between the card and another method of payment.
The increase in services available by gift cards is another reason for heightened consumer awareness. Gift card sellers now include return merchandise or claim refunds balances on cards that can be used the same way as gift cards. Cards can be purchased and redeemed at the sellerís physical location, the sellerís website and partner websites focused on finding deals for consumers. Many legitimate sites contain security measures to make sure the gift cards contain the stated value but there is no guarantee that they may be counterfeit or that they have been purchased using stolen credit cards.
Outstanding gift card values issued by New York corporations are required to be turned over to the Comptrollerís office as abandoned property after five years of dormancy, but in most cases no identifying information is provided by the issuer, making it extremely difficult to return the property to its rightful owner.
Visit http://www.osc.state.ny.us/giftcards.htm for more information.