Gift Card Tips: Giving and Receiving

Did you know that the federal government has rules about gift cards? Did you know that some gift cards may come with additional fees? Read on to learn more…

The basic rules of gift cards

By federal law, gift cards that will expire in less than 5 years can not be sold. In addition, gift cards cannot charge inactivity or service charge fees for the first 12 months, but after that first year, those fees could begin to take away from the face value of the card. In view of these rules, here are some tips for giving (and using) gift cards:

  1. If you have some old gift cards laying around, they may still be valid, but you ought to verify their available balance before use. Call the phone number on the card to find out.
  2. If you have a gift card with an expiration date, call the number on the card to see if the funds are still available, remembering the 5-year rule. If the funds are still available to you, a new card must be issued at no cost.
  3. If giving a gift card, it is a good idea to include the terms and conditions and the receipt, too. This will help protect you (or the recipient) and ensure the full benefit is received, especially if the card is lost or misplaced for an extended period.
  4. Some gift cards may have special fees that should be spelled out in the terms and conditions paperwork. Read the fine print! Merchant policies may set out additional terms from the federal rules.

If you lose a gift card, the merchant may not replace them. But it is still a good idea to write down the card number, security code and customer service phone number and store in a safe location in case you or the person you gifted loses the card. It might help.

Here’s another tip: Keep the card until you are sure you will not be making returns. Some merchants require refunds be applied to that gift card account number.

For more information, browse the Consumer Financial Protection Bureau web site, www.consumerfinance.gov.

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