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November 23, 2011


DiNapoli: Buy and Use Gift Cards Wisely This Holiday Season

State Comptroller Thomas P. DiNapoli today reminded state residents to pay special attention to fees and expiration dates when purchasing gift cards this holiday season. In addition, gift cards received last holiday season should be used immediately to avoid inactivity charges. Many, but not all, gift card sellers have eliminated these fees but consumers are advised to shop wisely.

"Financially, this is a tough holiday season and every cent counts," DiNapoli said. "Some retailers may still charge gift card fees. It is important that consumers check the terms of gift cards they buy or receive and use gift cards promptly. No one should lose money on a gift card."

Under the Federal Credit Card Act of 2009 many types of retail cards sold after August 22, 2010 may not charge inactivity fees unless the card has been inactive for at least 12 months. All terms and conditions for a card must be disclosed directly on the card, and gift cards may not expire within the first 5 years after purchase.

Since January 1, New York has required companies offering rebates to disclose whether those rebates will be issued in the form of a gift card, and whether any fees will apply to those cards. Rebate cards are not all covered by the same rules as regular gift cards, so this disclosure helps consumers identify the different cards and how they can be used.

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.

DiNapoli reminded consumers that gift cards may expire, and if an item costs more than the value of a card, consumers may not be able to split payment between the card and another method of payment.

Unused gift card values issued by New York corporations are required to be turned over to the Comptroller's office as abandoned property after five years of dormancy.

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