Gift card laws protecting the consumer have been passed in many states over the last five years. The majority of the laws revolve around eliminating merchants ability to apply expiration dates on gift cards. This was a major move forward. As we all know, in the past, a big problem was created by the gift card that was forgotten in a drawer for two years only to be ultimatly ruled expired.
However, these laws are not federal and not all states are participating. I live in Washington and can claim that my state has made these moves in the way to protect gift card participants. Can you add comments to this blog if you have knowledge about how your state participates in these laws? Many states have not moved to protect the customers.
Another important topic beyond state laws removing gift card expiration dates are services fees that many large banks apply to their gift cards. These bank gift cards are often simply pre-paid credit cards. In one of the biggest scams, banks and amercian express apply monthly fees to these prepaid cards. With these phantom fees, a prepaid gift card will eventually be driven to zero balance with time even if the recipient buys nothing. This is a big problem.
There are advances in gift card protection but we are not all the way there yet.
Added on 10/11/2009
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