Action Line: Know the rules on gift cards
| Friday, Jan 15 2010 11:14 AM
Last Updated Friday, Jan 15 2010 11:17 AM
Editor's note: Action Line is a weekly column from the Better Business Bureau answering consumers' questions and concerns about money and business issues.
Dear Action Line:
My grandmother is very difficult to buy gifts for, so this Christmas we all gave her gift cards. She was very appreciative and put them in the same drawer where she keeps all the gift cards we gave her last year. I've tried to tell her that they are going to expire or lose value and she just says she is saving them for "something special." I heard that they lose half their value after a year and then the companies charge a monthly service fee on top of that. What can I do to get her to spend them before they become worthless?
Dear Reader:
First, explain to Grandma that the family got her the gift cards because they wanted her to buy something she would enjoy and think of them when she used her gifts.
Second, there are different kinds of gift cards and it wasn't clear from your letter what type you meant.
Retail gift cards/certificates, like those from major retailers or restaurants, cannot expire in California. For all the rules of the statute governing gift cards, go to http://www.dca.ca.gov/publications/legal_guides/s-11.shtml.
Pre-paid credit gift cards are a different story. According to creditcard.com, an estimated $5 billion worth of gift cards will be lost to fees and expiration dates or misplaced, shoved in a drawer or otherwise neglected this year.
To help consumers and to slow this loss, the Federal Reserve Board announced a new set of proposed rules for gift cards on Nov. 16. Under the proposed rules, if someone gives you a retail gift card or gift certificate, it can't expire for at least five years from the date it was bought. The company can't take a service fee out of the value of the card for inactivity unless you haven't used the card for at least one year. If it has been more than a year they can't charge more than one service fee per month, and they have to have told you clearly about the fees they charge.
In the meantime, the Office of the Comptroller of the Currency (yet another government agency that deals with money) reminds you that you should make sure you know the following about any gift card you receive:
* Any fees that apply during or after the sale that reduce the value of the card;
* Expiration date;
* What to do if the card is lost or stolen;
* What to do if there are problems with the card;
* Where the card can be used; and
* How to claim any unused portion of the card.
If these disclosures aren't written on the gift card or its packaging, check for a toll-free number or Web site.
Offer to go through Grandma's stash and figure out the current value of her old gift cards and then offer to take her to lunch and the mall. Happy shopping!
Vickie Sanders is assistant director of business services for the Better Business Bureau serving Central California. Send your consumer concerns, questions and problems to Action Line at the Better Business Bureau, 1601 H St., Suite 101, Bakersfield, CA 93301 or vickie@bbbcencal.org.
