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Gift Certificates and Gift Cards

General:

A gift certificate or gift card is a voucher purchased by a consumer that is worth a specific cash value and can be used to purchase items or services from the business that issued it.   

Gift certificates sometimes can be issued for a general service instead of a cash value (for example, “Swedish massage” or “cooking class”). 

Not all cards purchased in a store are gift cards.  Reloadable pre-paid cards are not gift cards.  Store loyalty and reward cards, or any gifts issued as an award or part of a promotional program, are not gift cards (program details should be disclosed at sign-up).  Pre-paid calling cards are not gift cards.  Store credit refund cards are not gift cards.

 

Understanding Your Rights:

To understand your rights, you must first determine if Connecticut state law or Federal law applies to your gift certificate or gift card.

 

Connecticut Law

Connecticut has a consumer-friendly gift certificate and gift card law.  Under Connecticut law, certain qualifying gift certificates and gift cards cannot have an expiration date or inactivity fee. For most gift certificates and gift cards, a business must provide a cash refund upon consumer request for any gift card balance less than $3.00 after a purchase is made. 

Gift certificates and gift cards issued by Connecticut businesses will most likely be covered under the Connecticut state law.   Gift certificates and gift cards that are sold online or over the phone and shipped to a Connecticut address are also subject to our law.  To be covered by our law, the gift certificate and gift card must have been:

  1. Sold in Connecticut; and
  2. Not backed by a Federal financial institution.

For more information, see https://www.jud.ct.gov/lawlib/law/gift_cert.htm.

 

Federal Law

Under Federal law, gift cards may have an expiration date and inactivity fees. Bank-issued and bank-backed gift cards fall under federal law.   These bank-backed gift cards fall under Federal law even if they are sold in Connecticut or are shipped to a Connecticut address.  Often, these cards will have a major credit-card logo.  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

 

Even though these types of gift cards have expiration dates and fees, there are a few rules: 

  1. the gift card cannot expire within the first five years from the date it was issued;
  2. may not have fees during the first twelve months from the date it was issued;
  3. fees must be disclosed when the gift card is purchased;
  4. there are some limits on how often and when the fees can be deducted from the balance;
  5. any money added to the gift card may not expire within five years from the date it was deposited; and
  6. the five year time limit may be extended with replacement cards.

Other state and federal rules cover prepaid account cards.  Please see: https://www.cga.ct.gov/2017/rpt/pdf/2017-R-0061.pdf & Connecticut General Statutes § 42-260a.

 

When a Gift Certificate or Gift Card is Lost or Stolen:

Neither Connecticut nor Federal law protects you if your gift certificate or gift card is lost or stolen.  Some businesses may allow you to register your gift certificate or gift card, which could help you reclaim your balance if it is lost. You should check with the business or their website to verify. 

 

When a Business Closes:

It is very difficult to get your money back on an unused gift certificate or gift card if a business closes.  It is important to use a gift certificate or a gift card as soon as possible to avoid losing the value in the event of a business closing.  Watch the business’ website, Facebook page, and other social media accounts to check for any closing notices. 

However, closing businesses – and even different businesses – are sometimes willing to work with gift certificate and gift card holders to maintain their reputation.  If the owner of the closed business has another business or location, ask if the old gift card can be honored at the different location.  If a new owner takes over the closed business, s/he may be willing to honor the old gift card to gain your business.  Similarly, a competitor might honor all or part of gift cards from a closed store in order to earn your business.    

 

Summary:

When Buying a Gift Certificate or Gift Card

  • Make sure you know which type of card you are buying.
  • If you are buying a gift certificate for a service, get specific details about exactly what is included in the service and the value of the service to avoid confusion when the gift certificate is used.
  • 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 loaded money. When the card expires, the expiration date of the loaded money may be extended with a replacement card or the money may be refunded. There may be a fee involved.

When Receiving a Gift Certificate or 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 chance of losing the value of the card if the business closes.
    • If the card can permissibly charge fees, you will reduce losing the value of the card to fees.
  • Keep track of your balance.
  • Register your gift card, when possible. This may help protect you in case your card is lost or stolen. 

When using a gift card, ask up-front if the retailer accepts split payments, which is a payment with a gift card and another form of payment, including another gift card.