Gift Certificates and Gift Cards
A gift certificate is some form of record that has a value that a consumer can use at certain locations. Most commonly, the gift certificate takes the form of a gift card.
To understand your rights, you must first determine if Connecticut state law applies or Federal law applies.
There are two sets of law that may apply to gift certificates and gift cards. Gift certificates and gift cards that are sold in Connecticut and that are not issued by or backed by a Federal financial institution are covered under Connecticut state law. Gift certificates and gift cards that are sold in Connecticut and that are issued by or backed by a Federal financial institution are covered by Federal law.
To help determine if a financial institution is a Federal financial institution or not, please see the Connecticut Department of Banking’s website at: http://www.ct.gov/dob/cwp/view.asp?a=2228&q=296956&dobNAV_GID=1660
Gift certificates issued by Connecticut retailers will most likely be covered under the Connecticut state law. Gift cards issued by Connecticut retailers generally fall under Connecticut state law. However, bank-issued or backed cards, including some cards issued by malls, fall under Federal law.
Note also that gift certificates and gift cards that are sold online or on the phone that are shipped into Connecticut are subject to Connecticut state law unless they are issued by or backed by a Federal financial institution. Some companies that sell into Connecticut may opt not to ship cards into Connecticut so that they are not subject to the Connecticut law.
Fees and expiration dates:
If Connecticut state law applies gift certificates and gift cards may not have an expiration date or inactivity fee.
If Federal law applies gift cards purchased on or after August 22, 2010 may not have an expiration date within the first five years from issue and may not have initial fees during the first twelve months. Any money added to a card covered under Federal law may also not expire within five years from deposit. Note that under Federal law the five year period before which the balance expires may be extended with a replacement card. Fees, if any, must be disclosed and there are certain limits on fees, such as how often and when they can be deducted.
Other types of cards:
Neither the Federal nor Connecticut state gift certificate and gift card laws cover reloadable pre-paid cards. Reward cards are also not covered, but any expiration dates or fees must be clearly disclosed. Pre-paid calling cards are not covered.
When Buying a Gift Card
- Make sure you know which type of card you are buying.
- Buy only cards that clearly disclose information about the initial cost, monthly fees, and expiration date. If a card does not disclose information about fees and expiration dates or is not clear on fees and expiration dates, consider purchasing a different card.
- If a card permissibly has an expiration date, remember that the expiration date of the card may be different from the expiration date of the money. When the card expires, the expiration date of the money may be extended with a replacement card or the money may be refunded. There may be a fee involved.
When Receiving a Gift Card
- Try to spend the entire balance as soon as possible.
- You will be more likely to use all of a card’s value.
- You will reduce the chances of losing some or all of the value of the card if the issuer goes bankrupt or otherwise goes out of business.
- If the card can permissibly charge fees, you will reduce losing some or all of the value of the card to fees.
- Keep track of your balance
- Some gift card issuers provide information online about your card balance and some can inform you of the balance upon request.
- When using a gift card ask up-front if the retailer accept split payments, which is a payment with a gift card and another form of payment, including another gift card.
For additional information please see the Connecticut State Treasurer’s website at: http://www.ott.ct.gov/about_giftcardlaw.html