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Have you ever received a gift card as a present?  Do you know what fees are associated with that card? Do you know when it expires?  Do you know where to report if you have a problem?  Many consumers buy gift cards for others, and if you are one of those recipients, educate yourself as to your rights under the law.

What Is a Gift Card?

Under Massachusetts law, gift cards and gift certificates are purchased by a buyer for use by a person other than the buyer.  They are not redeemable in cash and are usable on the face amount in lieu of cash in exchange for goods or services supplied by the seller.  Gift cards are not prepaid cards, debit cards, or credit cards, though they may look similar.

Fees

Generally, gift cards may have certain types of fees, including fees for activation, transactions, replacement, inactivity, and others.  These fees may detract from the gift card’s value.  These fees must be properly disclosed, which means the card issuer must state that a fee may be charged, the amount of the fee, and when the fee may be assessed. Look for these disclosures before you purchase the gift card.

Expiration Dates

Federal law requires that a gift card cannot expire within five years from the date of purchase, while Massachusetts state law requires a gift card to last for a minimum of seven years from the date of purchase.  But which law applies? Generally, bank issued cards (Visa, MasterCard, American Express, etc.) that are redeemable at different merchant locations fall under federal law. Conversely, many merchant issued gift cards (for a particular store or restaurant) are often covered under state law.

Redemption of Value

If the gift card or certificate is of the kind which value cannot be added to it and the card or certificate has been redeemed for at least 90% of its face value, the holder under Massachusetts law can request to receive the balance in cash.  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 under Massachusetts law can request to receive the balance of $5.00 or less in cash.

 

Gift Card Survey

The Office of Consumer Affairs and Business Regulation reviewed numerous gift cards online for fees associated with the card, expiration date, and the governing laws for any disputes related to the cards.

Of the 53 retail businesses surveyed, fifteen identified the state laws that applied to each gift card. Twenty-five did not have any fees or expiration dates associated with them, and sixteen did not have any information available online regarding the policies.

 Abercrombie & Fitch:  Terms and conditions are governed by U.S. laws, but no particular state is specified. Abercrombie & Fitch has no expiration date or fees associated with its gift cards.

American Apparel: No information was provided on American Apparel’s website.

American Eagle Outfitters: Terms and conditions governed by the state where it was purchased. American Eagle Outfitters has expiration date or fees associated with its gift cards.

Boston Sports Club: No information provided on its website.

Apple Store, iTunes Store: Terms and conditions governed by Virginia laws. Apple has no expiration date associated with its gift cards, but any information regarding fees was not available on their website.

Bed Bath & Beyond: Bed Bath & Beyond has no expiration date or fees associated with its gift cards. No information regarding the governing law of the terms and conditions of Bed Bath & Beyond’s gift cards was provided.

Best Buy: Best Buy has no expiration date or fees associated with its gift cards.  No information regarding the governing law of the terms and conditions of Best Buy’s gift cards was provided on its website.

Bloomingdales: Bloomingdales imposes no expiration date if the card was purchased on or after 2/03/08 and there are no fees associated with its gift cards.  No information regarding the governing law of the terms and conditions of Bloomingdales’s gift cards was provided on its website.

Brooks Brothers: No information was provided on the Brooks Brothers website.

Cheesecake Factory:  Disputes must be settled under California laws in Los Angeles. No information was provided on fees or expiration dates.

 Chipotle: No information was provided on its website.

CitySports: No information was provided on its website.

Costco: Costco does not impose an expiration date on its gift card, but any information regarding fees was available on its website. No information regarding the governing law of the terms and conditions of Costco’s gift cards was provided on its website.

CVS: Terms and conditions are governed by Maine laws. Disputes are adjudicated in Cumberland County, Maine. No expiration dates or fees associated with the gift card were provided.

Dave & Busters: Terms and conditions governed by Oregon.  Dave & Busters has no expiration date or fees associated with its gift cards.

Dunkin Donuts: Terms and conditions are governed by Maine laws. Dunkin Donuts has no fees or expiration date associated with its gift cards.

Foot Locker: Foot Locker has no expiration date or fees associated with its gift cards. No information regarding the governing law of the terms and conditions of Foot Locker’s gift cards was provided on its website.

Forever 21:  No information available on the website

GameStop: Game Stop has no expiration date associated with its gift cards, but any information regarding fees was not available on its website.  No information regarding the governing law of the terms and conditions of GameStop’s gift cards was provided.

Gap, Old Navy, Banana Republic:  A gift card purchased at any Gap, Inc. retail store (Banana Republic Old Navy, Gap, or Athleta) may be used in any Gap, Inc. store in the U.S. and Canada, including outlet and factory stores. Gap, Inc. does not have any fees or expiration date associated with its gift cards. No information regarding the governing law of the terms and conditions of Gap, Inc.’s gift cards was provided on its website.

GNC: No information provided on its website.

H&M: No information was provided on its website.

Hollister:  Terms and conditions are governed by U.S. laws, but no particular state is specified. Hollister has no expiration date or fees associated with its gift cards.

Home Depot: Home Depot has no expiration date associated with its gift cards, but any information regarding fees was not available on its website. No information regarding the governing law of the terms and conditions of Home Depot’s gift cards was provided on its website.

IKEA: IKEA does not sell gift cards online. IKEA has no expiration date associated with its gift cards, but any information regarding fees was not available on its website.

J Crew: Terms and conditions are available online but do not specify whether any fees or expiration dates apply.

Legal Seafoods:  Terms and conditions are governed by the laws of the state where the card was purchased. The card has no expiration date and no fees.

LOFT: No information was provided on its website.

Lord & Taylor: Lord & Taylor has no expiration date or fees associated with its gift cards. No information regarding the governing law of the terms and conditions of Lord & Taylor’s gift cards was provided on its website.

Lululemon: Terms and conditions governed by Vancouver, B.C., Canada laws. Lululemon has no expiration date or fees associated with its gift cards.

Macy’s: Macy’s imposes no expiration date if the card was purchased on or after 2/03/08 and there are no fees associated with its gift cards.  No information regarding the governing law of the terms and conditions of Macy’s gift cards was provided on Macy’s website.

McDonald’s:  Terms and conditions are governed by Illinois laws. There are no expiration dates or service fees associated with its cards. Gift cards are issued by P2W, INC NEP.  P2W is the sole legal obligor to the card holder. By purchasing a card, the holder knowingly releases McDonald’s from any and all liability or claims of any nature related to the gift card.

Microsoft Retail Store: Microsoft has no fees or expiration date associated with its retail store gift cards. No information regarding the governing law of the terms and conditions of Microsoft’s gift cards was provided on its website.

Milton’s: No information was provided on Milton’s website.

Nordstrom: Nordstrom has no expiration date or fees associated with its gift cards.  No information regarding the governing law of the terms and conditions of Nordstrom’s gift cards was provided on its website.

North Face: Terms and conditions are governed by California laws, subject to exclusive jurisdiction of state and federal courts in San Francisco and Alameda counties, California.

Patagonia: Disputes must be settled in Ventura, California under California laws.  No information was provided on fees or expiration dates.

Payless Shoe Source: No information provided on its website.

Petco: No information provided on its website.

SEARS: Sears has no expiration date or fees associated with its gift cards.  No information regarding the governing law of the terms and conditions of Sears’s gift cards was provided on its website.

Sephora: Terms and conditions are governed by Florida law.  Sephora has no fees or expiration date associated with its gift cards.

Shaws: No information was provided on Shaws’s website.

Starbucks: Terms and conditions governed by Washington laws. Starbucks has no expiration or fees associated with its gift cards.

Stop & Shop: Consumers must visit retail store to review terms and conditions.

TJ Max: TJ Max has no expiration date associated with its gift cards, but any information regarding fees was not available on its website. No information regarding the governing law of the terms and conditions of TJ Max’s gift cards was provided.

Trader Joes: Trader Joes does not offer gift cards online. The terms and conditions are to be posted with their gift cards in stores.

Uniqlo: Uniqlo does not sell gift cards online. Uniqlo has no expiration or fees associated with its gift cards. No information regarding the governing law of the terms and conditions of Uniqlo’s gift cards was provided.

Urban Outfitters: No information available on the website.

Vineyard Vines: No information was provided on the Vineyard Vines website.

Walgreens: No information was available on its website.

Walmart: Terms and conditions are governed by California laws. Walmart has no expiration date or fees associated with its gift cards.

Wegman’s: Wegman’s has no fees and no decline in value in terms of an expiration date, but after five years, any remaining funds will be submitted to New York according to New York’s Abandoned Property Law.

Whole Foods:  Terms and conditions are governed by Virginia laws. Disputes are handled in Richmond County, Virginia. No information on expiration dates or fees associated with the gift cards was provided.

 

 TIPS

 

  • Bank issued cards are frequently governed under federal law while merchant gift cards are typically governed under a state law (and not necessarily the state in which you buy it).
  • Before you purchase a gift card, read and understand the terms and conditions associated with it. Terms and conditions are not always found online, so you should check the actual instructions on the package in the store before purchasing the gift card.
  • Most major retailers do not impose any fees or expiration dates, but smaller, regional or local businesses might impose such conditions. It is important to pay close attention, regardless of the location and size of the business, to any conditions associated with the gift card.
  • Look specifically for the fees associated with the card. These could be dormancy fees, inactivity fees, or service fees. If there are any fees associated with the purchase or use of the card, consider avoiding that card altogether. Cards issued under Massachusetts law cannot incur certain types of fees, such as dormancy fees.
  • Look specifically for mention of an expiration date. If it is before the regulated time period, report the business to the Consumer Financial Protection Bureau or the Attorney General for the state in which the card is issued. Under federal law, cards must be valid for at least five years. Cards issued under Massachusetts law must be valid for at least seven years.

Visit our website for more gift card tips, information about the gift card law, and for more information about your shopping rights. The Massachusetts Attorney General’s website also provides helpful information about gift cards. To file a complaint related to a gift card, contact the Attorney General’s Office. For more information or questions, contact our Consumer Information Hotline at (617) 973-8787 or email us.

 

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