Consumer: I love the convenience of gift cards but wonder why some cards have expiration dates and others do not. What are the rules?
Attorney General Rob McKenna: Gift cards are becoming increasingly popular. One study estimated that consumers spend more than $18 million annually on gift cards during the holiday season. Washington’s gift card and gift certificate law, which went into effect in 2004, helps ensure that consumers receive what they paid for – including every nickel of a gift card or gift certificate’s purchase price.
Under the law, merchants can no longer assign expiration dates or inactivity fees except in limited circumstances. Once your gift card balance goes below $5, you have the right to redeem the balance for cash.
However, there are some exceptions. Washington’s law doesn’t apply to bank-issued gift cards such as those issued by VISA or MasterCard, which are regulated under federal laws. Many gift cards sold by shopping mall management companies are issued by banks. These cards may expire or have associated maintenance or inactivity fees.
The law also excludes gift cards or gift certificates used by charities for fundraising, issued through loyalty or awards programs, distributed for free as part of a promotion, or redeemable solely for goods or services provided by artistic and cultural organizations in our state.
A merchant can charge a minor inactivity fee if you have less than $5 remaining on a card and you haven’t made a purchase within the past two years, checked your balance or added to the card’s value.
Here are some tips to keep in mind when you give or receive a gift card:
- Treat gift cards like cash. Washington’s law does not require merchants to replace a lost or stolen card, but some retailers will if you can provide proof of purchase.
- Keep receipts. Keep receipts that show the purchase price and prove the card was activated. Some retailers encourage gift card recipients to register their card through the store's Web site, which enables consumers to check a balance online and receive a replacement card. It’s also a good idea to make a note of the card number and keep it in a safe place.
- Read the fine print. State laws regarding gift cards and certificates vary. Understand the retailer’s policy before you purchase a gift card, especially if the recipient lives outside of Washington. Details about fees and expiration rules are usually on the card itself. If you don’t see them, ask.
- Know your rights. Most merchants in Washington comply with the state’s law, but it’s good to know your consumer rights in case a salesperson is unfamiliar with the rules.