Gift Cards May Expire Quickly

HARTFORD — Although you might feel secure purchasing or even regifting a retail merchant gift card this holiday season, beware. Connecticut’s gift card expiration law will not extend to cards issued by out-of-state banks and retail companies, so those well-intentioned plastic certificates may not have a long postholiday lifespan.

Attorney General Richard Blumenthal recently warned holiday shoppers to be cautious — and consider alternatives — before buying gift cards this holiday season.

Mr Blumenthal said that some companies may seek to circumvent state gift card laws that ban expiration dates and dormancy fees by issuing the cards through national banks that are subject to federal law, not state gift card regulations. All companies that sell gift cards are subject to prosecution for any deceptive representations made to consumers.

Additionally, Mr Blumenthal’s office receives numerous reports each year of restaurants or other businesses that end up closing down due to financial implosion and bankruptcy — leaving many consumers with unused and useless gift cards.

“Cash may seem crass, but often is a safer gift than gift cards. If consumers opt to buy gift cards, they should ensure that the retailer is issuing the cards directly — and not through a national bank that may seek to impose an expiration date or dormancy fees if the cardholder fails to use the card in a timely manner,” he said.

“Beware of the gifts that keep on taking,” Mr Blumenthal added. “Before buying gift cards, consumers should read the fine print — or give cold, hard cash instead. Consumers rightfully expect their gift cards to be worth the exact cash value paid for the cards — as good as money.”

By opting to give cash over gift cards, consumers can send a powerful message to businesses that drain and degrade gift card worth and trust.

“My office will continue to vigorously pursue businesses that impose dormancy fees or expiration dates, violating state gift card laws,” Mr Blumenthal promised.

“Consumers who encounter such practices should immediately report the matter to my office so that we can determine whether legal action is appropriate,” he added.