Be Careful when Giving, Receiving Gift Cards

QUESTION:

Can you tell me what the rules and restrictions are regarding gift certificates and gift cards?

ANSWER:

Many individuals will receive gift certificates or gift cards as a present during this holiday season. The rules for use of these cards are modified periodically to protect the consumer from fraudulent practices related to the purchase or usage of these items.

To help everyone understand their rights when it comes to gift cards and gift certificates, the would like to provide the following information offered by the Office of the Attorney General.  More information may be found at www.mass.gov/ago.

Under Massachusetts Law, a gift certificate or a merchandise credit must be redeemable for seven years from the date of issue. The seller must indicate the date of issuance and expiration date on the face of the certificate, or, if buying an electronic card with a banked dollar value, the expiration date must appear on the printed sales receipt. If an expiration date is not provided, the gift certificate or gift card should be good forever.

Once a consumer redeems a gift certificate or gift card for 90% of its value, the balance is redeemable in cash. When a gift certificate or gift card, by its terms, allows the purchaser or holder to add value, the purchaser or holder of a gift certificate must make an election to receive the balance in cash or continue using the gift certificate or card once it has been redeemed such that the value remaining is $5 or less. A gift certificate with a zero balance is void.

State law, however, does not apply to gift cards issued by a national bank, even though these cards may be sold by an entity other than the bank. For instance, certain mall gift cards may not follow the seven year rule and may also charge fees, because the cards are issued in conjunction with a national bank. National bank-issued cards may be redeemable for a shorter period of time-five years.

These cards may also have fees attached that will diminish the value of the card over time-some have monthly "maintenance" or "dormancy" fees that may kick in when the card is not used within a few months; they may also have fees assessed for checking on the value remaining on the card; lost or stolen card fees; or replacement fees if the card expires by its own terms but you still have value remaining on the card you want to use. These fees must be disclosed to you.

Read all accompanying literature that comes with the card or visit the Website of the company you are purchasing the card from to ensure that you know what you are getting. Be sure to provide all of this information to the person to whom you are giving a gift card or gift certificate.

Anyone with questions for the Chief’s Column may submit them by mail to the Grafton Police Department, 28 Providence Road, Grafton, MA 01519. You may also email your questions or comments to chief@graftonpolice.com. Please include an appropriate subject line, as I do not open suspicious email for obvious reasons. 

Happy Holidays from the Grafton Police Department!

Normand A. Crepeau, Jr. is Grafton's Chief of Police.