A gift card is one of few products available to shoppers this holiday season that is one-size-fits-all and is never the wrong color.
It’s the ease of both giving and receiving gift cards that makes them one of the top purchases each Christmas. Recipients can use the funds stored on a gift card like cash to buy what they want from the card issuer, such as a restaurant or department store.
As gift-card giving rapidly grew more popular several years ago, the State of Arkansas took steps to protect consumers who bought or received the cards, with the Legislature enacting the Fair Gift Card Act in 2007. The Act helps consumers to avoid some potential pitfalls with gift cards and gift certificates such as inactivity fees and arbitrary expiration dates.
Attorney General Dustin McDaniel issued this consumer alert to make sure Arkansans understand their rights regarding gift cards and gift certificates.
“Consumers often turn to gift cards when it is hard to find just the right gift for a loved one,” McDaniel said. “Before the State enacted the Fair Gift Card Act, it was difficult to keep up with expiration dates and balances on cards, which made them a little less convenient for consumers. Now, Arkansans can know for certain the terms and conditions of the cards or certificates they purchase.”
McDaniel said consumers should always read the terms and conditions of a gift card to be aware of the card’s expiration date, whether there are any fees associated with the card or whether money may be deducted from the card’s balance after a period of nonuse.
State law and federal rules require that:
• Expiration dates on gift cards must be disclosed. The expiration date must be at least five years from the date the card was purchased or from the last date additional money was loaded on to the card.
• No inactivity fees may be assessed by card issuers unless the card has been inactive for two full years.
• Any and all additional fees associated with the card must be clearly disclosed on the card or its packaging.
McDaniel said buyers and recipients should always keep original receipts, along with the card’s ID number, in a safe location. Those may be necessary in case the card is misplaced or forgotten. Report to the card’s issuer if a card has been lost or stolen.
To ensure recipients get the card’s entire value, be sure to use it as soon as possible. According to a 2012 estimate, more than $2 billion in money loaded onto gift cards went unredeemed that year.
McDaniel provided these additional recommendations:
• Be sure to purchase gift cards from trusted businesses. Don’t buy from Internet auction sites in order to protect against buying counterfeit or fraudulently obtained cards.
• If the terms and conditions of a card do not seem acceptable or if issuers require payment of an additional fee to purchase a card, shop elsewhere.
• Buy from a financially stable entity. If a retailer or restaurant closes or files for bankruptcy, cards may lose their worth.
• If after a period of inactivity or nonuse it appears that the card has been expired or that funds have been deducted, contact the card issuer. It is possible the issuer may choose to honor the card or reverse the fees.
Consumers who have problems with gift cards even after addressing the matter with the card issuer may contact the Federal Trade Commission (for cards issued by retailers) at www.ftc.gov or the Comptroller of the Currency’s Customer Assistance Group (for cards issued by national banks) at 800-613-6743.
For more information about this or other consumer issues, contact the Attorney General’s Consumer Protection Division at 800-482-8982 or visit the division’s website, www.GotYourBackArkansas.org.