Gift cards are a popular present to give and receive, especially for last-minute shoppers and for people without a wish list, but not all gift cards are alike. From expiration dates to potential scams, know the basics about gift cards before making your purchase.
Gift cards are protected under both state and federal law. Under Ohio law, gift cards in any form — electronic, paper, or other — generally cannot expire for at least two years. Under federal law, gift cards issued in electronic format for a specific amount cannot expire for a minimum of five years. Pay attention to a card’s expiration date, especially if you plan to buy a gift card from a reseller.
Keep in mind that a gift card that is branded by a credit card company and can be used almost anywhere may reduce in value faster than a single-store gift card. If a gift card has no expiration date, it is generally valid until redeemed or replaced with a new card. Nevertheless, it’s often best to use a gift card as quickly as possible to reduce the chance that it will be lost or stolen or that the business will close before you’ve used up the gift card.
There are a number of exceptions related to gift card laws. For example, gift cards purchased for a specific service, such as a gift card for one manicure (as opposed to a specific dollar amount to a nail salon), are not protected under federal law. Additionally, “bonus” cards are not protected under state or federal law. Around the holidays, many businesses offer deals, such as “buy a $100 gift card, get a $20 gift card free.” While the $100 gift card would have all the protections the law offers, the $20 gift card would not be subject to the protections and could expire at any time. Closely check the expiration dates and other restrictions of any bonus cards.
Sometimes, gift cards also can be used in scams. For example, you may come across a legitimate-looking website advertising better deals than other stores’ websites, but at the checkout page, the website requests the number to a gift card (not associated with the company) rather than a credit or debit card. Beware! Scammers may create phony websites — complete with made-up customer reviews — to trick people into revealing redeemable gift card information. Unfortunately, once the information is provided, any money loaded on the card will be lost.
Similarly, a con artist may call you, claiming that you’re in trouble with the IRS or that one of your family members has been in an accident, and ask you to pay immediately using a gift card. This is a common sign of a scam, because once you provide the gift card information, even just by reading the gift card numbers over the phone, the con artists can drain the funds.
When you buy gift cards in a store, be sure that any PINs, generally located on the back of gift cards, are not already scratched off. Some scammers go into stores, scratch off and record PINs, and put the gift cards back on the shelf. Then they regularly check to see if a consumer has purchased (or put any funds on) the card. The scammer then attempts to drain the card.
Consumers who suspect a scam or an unfair business practice should contact the Ohio Attorney General’s Office at www.OhioProtects.org or 800-282-0515.