Gift Card Return Laws

Written by rachel nall
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Gift cards have become an increasingly popular gift choice for many as they are good for cash that can be used at any time with no penalty...right? In actuality, some gift cards may decline in value over time, and may or may not be redeemable for cash in some instances. While gift card laws may vary by state, read on to find out if your state has a specific gift card return policy.

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Basic Requirements

The courts system treats gift cards much as they would a paper certificate: The certificate can be used, transferred in most instances, and when lost, is considered gone. There are several types of fees that a gift card issuer (depending on the type of business) can levy. For example, dormancy (fees) can be levied if the card is not used or if it features an expiration date in which the card is no longer valid. If these rules apply, it is necessary to notify shoppers of return policies via a printed sign, message on the gift card receipt, or terms printed on the card itself.

Single-Store Cards

These types of cards generally offer the most consumer protection when it comes to return laws and fees. When it comes to getting cash for the card, a business should refund your money if the amount contained on the card is £6 or less. If the amount is greater than £6, a new card or certificate can be issued, but a cash refund does not legally need to be made.

Mail or Multi-Store Laws

Gift cards or certificates issued for a number of businesses (such as an entire mall complex) do not have many restrictions concerning fees or expiration dates, other than they should be printed on the card itself. Consumers should pay especially close attention to these fees as they may quickly devalue the worth of the card.

Restaurant Cards

Restaurant gift cards are one of the few gift cards allowed to have expiration dates. The expiration date should be printed on the card or certificate in 10-point type. Failure to do so means the person to whom the card was issued is protected by law. However, restaurant gift cards good for a specific meal cannot have an expiration date, according to the California Department of Consumer Affairs.

Cards Sold by Banks

These types of cards are typically sponsored by a major credit company, such as American Express, Visa, or others. Therefore, they are often subject to similar terms and conditions as credit cards, such as purchase fees, inactivity feeds, and transaction fees. A disclosure notification as well as contact information for balance inquiries or other questions should be included.

Return Practices

The law protects both consumers and businesses from fraudulent acts in relation to returning gift tokens or gift cards. Retailers may charge restocking fees on the card; however, retailers in many states are required to provide a refund, credit, or exchange within seven days.

Examples of gift card laws that vary across the United States include: Montana state law requires a vendor to issue a cash refund if the card was issued for more than £3, yet has a current value of less than £3.

Washington state requires vendors to issue a cash redemption only if the business levied a dormancy charge and the gift card is worth less than £3. (Source: DLA Piper)

State Laws

For additional information on gift card laws by state, visit the Consumer's Union website at http://www.consumersunion.org/pub/core_financial_services/003889.html for a list of laws by state.

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