Giving the Gift of Gift Cards…Hold Up a Minute
Gift cards are my go-to gift for children, teenagers, brides, and mothers-to-be. Even more so after reading that we spend over $57 billion a year on unwanted gifts. I think I’ve received at least a couple million dollars worth.
So giving the gift of gift cards seems like the best option, right?
Right. But there are new rules and a rack full of watch-outs.
According to the Federal Trade Commission (aka the government’s consumer watchdog):
New federal rules that took effect in August are designed to protect consumers, and will restrict fees and affect gift card expiration dates. These new rules apply to two types of cards: Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express or Visa and can be used wherever the brand is accepted. Here are the highlights:
- Money on a gift card cannot expire for at least five years from the date the card was purchased, or from the last date any additional money was loaded onto the card. If the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost.
- Inactivity fees can be charged only after a card hasn’t been used for at least one year, and then only once per month. But fees may be charged to buy the card or to replace a lost or stolen card.
- The card must clearly disclose its expiration date, and the card or packaging must clearly disclose any fees. There is one exception: Some cards produced before April 1, 2010, that list a short expiration time or inactivity fees in the first year may be sold through January 31, 2011. However, no matter what a card says, consumers still are protected by the new rules.
The FTC encourages us to read the fine print and only buy gift cards from reputable, well-established merchants. Make sure they aren’t about to file bankruptcy and are in relatively decent financial shape. The FTC also recommends you give the recipient a copy of the receipt in case they have problems redeeming/using the gift card.