Gift Card Facts

Gift Card / Certificate Facts

Consumers spend billions of dollars annually on gift cards and gift certificates. For the most part, they are easy to use and are gifts that have universal appeal. However, too many times, users of these cards have found that their value no longer equals that which appears on the card or, worse,that the card or certificate has expired.

New York State law now protects consumers against early dormancy fees, hidden fees and other restrictions on these popular shopping cards.

This law strengthens consumer protection in New York State by ending practices that have led to confusion and loss of value of gift cards and gift certificates. The law requires retailers to fully disclose gift card fees, limitations and conditions so that consumers are able to make the most informed decision regarding the value of their gift.

Dormancy fees are charged when consumers have not used all or some of the card’s value within a certain period of time, resulting in a reduction of the value of the gift card. New York State law now prohibits the imposition of any “dormancy fee” on gift cards or gift certificates prior to the 13th
month of dormancy or non-use.

Signs must be prominently posted for the consumer that state ‘Terms and Conditions are Applied To Gift Certificate Cards,’ providing consumers a tool by which to make an informed purchase. Consumers will be better able to select gift cards because terms and conditions on the use of a gift card or gift certificate, including information regarding expiration date and any fees, must be provided to the consumer. This disclosure is also required in all Internet and retail advertising. The law does not affect gift certificates or gift cards that have no terms or conditions (i.e. an expiration date or dormancy charge) and no other disclosure requirements are mandated by the law. This law also excludes debit cards linked to a deposit account; pre-paid telephone calling cards; flexible spending accounts; dependent care reimbursement accounts or health savings accounts.

The Attorney General is charged with enforcement of this law and may seek restitution from violators.

The Attorney General's website can be found here: http://www.oag.state.ny.us/