Black Friday has come and gone. You’ve made the rounds of stores. You’ve searched the Internet for that “perfect gift” and come up empty.
How about a gift card?
They’re touted as the perfect way to allow the recipient to get whatever he or she wants with no exchanges or hassles to get in the way of instant gratification. It’s perfect. There is no downside.
Unless that gift card ends up among the $6.8 billion in cards that aren’t cashed in every year. Then it’s just a hunk of plastic. It may be a hunk of plastic that costs more than you’d expect.
The federal Credit CARD Act of 2009 did away with expiration dates (Maine pulled the plug on expiring gift cards some time ago). New federal rules affecting gift cards were to take effect in August. Consumer advocates were hardly surprised when the money-makers cried because cards they had already printed did not have the new expiration date policy printed on them.
They asked for a delay, and the Federal Reserve Board agreed to put off implementation until Jan. 31, 2011. As of that date, no gift certificate or gift card produced before April 1, 2010, can be sold unless its expiration date is clearly spelled out. That means “buyer beware” this shopping season. While entities subject to Maine law cannot impose an expiration date on gift cards or prefunded bank cards, purchase of those items in other states may not carry similar protections.
When the reforms are fully implemented, the issuers will have to scale back their fees, which had siphoned off much of many cards’ value over time. Fees for dormancy (lack of use) and maintenance (reloading your card or even checking your balance) will be limited to one fee of any type per month. Fees also won’t be charged unless the card hasn’t been used for at least a year.
Exempted from the new rules are prepaid telephone or voice over Internet protocol (VoIP) cards, reloadable cards, cards not available to the general public and gift cards given as promotions or awards.
Last year at this time, Maine’s Bureau of Financial Institutions advised shoppers to read all the fine print before buying gift cards. Learn about:
ä Fees during or after sale of the card.
ä Expiration date.
ä Where the card can be used.
ä What to do if the card is lost, stolen or if there are other problems.
ä How to claim an unused portion of the card.
Maine law allows users who redeem gift cards in person and have a balance of under $5 left on the card to receive the difference in cash. Maine sellers also must disclose any fees, and they may not enforce an expiration date.
The bureau notes that consumers can avoid most fees by using cards soon after they are purchased. Cards that are not used for two years can be considered “abandoned property.” The bureau also advises careful handling of the cards, as there are generally limited options if they are lost or stolen.
To check Maine law on gift cards and other matters, visit www.maine.gov/legis/lawlib/whatis.htm. For tips on avoiding scams, see www.scambusters.org/giftcard.
Consumer Forum is a collaboration of the Bangor Daily News and Northeast CONTACT, Maine’s membership-funded, nonprofit consumer organization. Individual and business memberships are available at modest rates. For assistance with consumer-related issues, including consumer fraud and identity theft, or for more information, write: Consumer Forum, P.O. Box 486, Brewer 04412, go to http://necontact.wordpress.com, or e-mail at firstname.lastname@example.org.