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Gift certificates are a popular option for many gift-givers during the holiday season. From nail salons, to restaurants, to grocery stores, gift certificates can be used just about anywhere.  The National Retail Federation said gift cards are the most popular item on consumers’ wish lists for the 12th straight year, requested by 60% of a 7,313 sample of people.

 

If your go-to gift this year is a gift certificate, remember these rules:

 

  • Gift certificates bought in Massachusetts are valid for seven years and are not subject to any fees.
  • Generally, bank issued cards (Visa, MasterCard, American Express, etc.) that are redeemable at different merchant locations fall under federal law, which means they’re valid for five years. Bank issued cards may also have certain fees, including fees for activation, replacement, inactivity, and others. These fees must be properly disclosed so it’s important consumers look for them.
  • Certificates not clearly marked with an expiration date and issuance date must have those dates clearly printed on the sales receipt, or available on line. If the dates are not provided, the gift certificate is good forever.
  • Once you have used 90% of the value and you can’t add value, you may choose to take the remaining value in cash or spend the remaining value of the gift certificate.
  • If the gift card or certificate is of the kind which value can be added to it and the balance is $5.00 or less, the holder can add value or request to receive the balance of $5.00 or less in cash.
  • Gift cards are not prepaid cards, debit cards, or credit cards, though they may look similar.

 

Remember: Massachusetts law defines electronic cards with a banked dollar value as gift certificates, even if they are technically gift cards. The same rules that govern gift certificates apply to gift cards.

 

Avoiding Scams

Gift certificates play a common role in scams during the holiday season.  The Federal Trade Commission (FTC) reports that 26% of victims reporting scams between January and September 2018 said they were asked to pay with gift cards. Losses through September from gift certificate fraud totaled $53 million, up from about $40 million for all of 2017, with a median loss of about $500 per incident.  Remember these tips to evade gift card scams.

  • Gift cards are not an acceptable form of payment for utilities, taxes, or bail. Scammers will often request payments by gift cards because they can be redeemed quickly.
  • Keep your receipt as proof of purchase. Some retailers can track when the card was purchased and used, so there is a chance you could be reimbursed.
  • Similar to a credit or debit card, NEVER provide the numbers on the back of the card to anyone. Those numbers are what gives the card value! Also, check the back of cards before you purchase them to make sure the PIN numbers aren’t scratched off. Scammers can use the PIN and the card numbers to drain the card balance after you pay to activate it!
  • Never surrender your social security number, bank account info, or any other important information when purchasing a gift certificate. A reputable retailer will never request this information.

Changes are constantly being made to combat gift card scam attempts. Walmart, Target, and Best Buy have all made changes to their gift cards this year in an attempt to prevent scams and fraud this year.  These changes include reducing purchase limits on store branded cards and prohibiting the redemption of store branded cards for other gift cards. The companies have also increased employee training to help employees better detect signs of a scam.

 

If you think you may have fallen victim to a scam, make sure to report it to your local police department and the Federal Trade Commission.

 

This post is part of our “Holiday Shopping” series, bringing you timely information as you shop this holiday season.  For more information on your shopping rights, click here.

 

If you have additional questions, contact the Office of Consumer Affairs and Business Regulation by calling our Consumer Hotline at (617) 973-8787, or toll-free in MA at (888) 283-3757, Monday through Friday, from 9 am-4:30 pm. Follow the Office on Facebook and Twitter, @Mass_Consumer. The Baker-Polito Administration’s Office of Consumer Affairs and Business Regulation along with its five agencies work together to achieve two goals: to protect and empower consumers through advocacy and education, and to ensure a fair playing field for Massachusetts businesses. The Office also oversees the state’s vehicular and customized wheelchair Lemon Laws and Arbitration Programs, Data Breach reporting, Home Improvement Contractor Programs and the MA Do Not Call Registry.

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