We support reforms to the financial marketplace to curb bad practices by banks and lenders.
Prepaid gift cards are a rip-off! The balances start to decline after receiving the cards. You can’t cash them in.
Gift Cards
Many consumers have either given or received a gift card. Consumer protections for gift cards vary, depending on the type of gift card.
Bank Issued Gift Card:
Federal law prohibits quick expiration dates and fees on bank issued gift cards, or those with a major card network logo, such as a Visa, MasterCard or American Express:
• Gift cards cannot expire less than five years from the date the card was purchased or money was last added to the card, whichever is later.
• No fees if the card has been used within the past 12 months. If a card remains unused for 12 months, then there can be one fee a month.
• Stronger state laws continue to apply, including for both expiration dates and fees.
Store Issued Gift Card:
Several states have strong laws on store gift cards, banning expiration dates and fees on these gift cards. If a consumer obtains a gift card from a state without a gift card law, or provides weaker protections, the same federal protections for bank issued gift cards apply.
Rewards, Loyalty, Promotional, Telephone or Rebate Card:
• No protections.
Publications
- Gift Cards: Consumer Tips for the 2012 HolidaySeason
Gift cards continue to be a very popular gift giving solution. Before you buy or receive a gift card this holiday season, be sure you know which protections apply to your card, as they may vary depending on the type of card you buy.
- Gift Cards 2010: New consumer tips for the holiday season
Gift Cards 2010: New Consumer Tips for the Holiday Season The year 2010 saw many new developments for gift cards. The gift card provisions of the Credit CARD Act went into effect on August 22, 2010, giving all gift cards minimum protections against early fees and expiration dates. And “virtual” or “e-gift” cards, which you Continue Reading
- State gift card consumer protection laws
A summary of key features of many state gift card laws.
- Fact sheet on state gift card protection laws
A summary of key features of many state gift card laws.
- Gift Cards
Do you have gift cards you can no longer use?
- Gift Cards
Many consumers have either given or received a gift card. Several states have passed strong laws on retailer gift cards, resulting in many gift cards which no longer have expiration dates or fees. But, consumers continue to experience problems in trying to use their gift cards, especially with the growing number of retailers filing for bankruptcy.
- Retailer Bankruptcy and Gift Card Watch
Recent Retailer Bankruptcies * This list is not all-inclusive of retailer bankruptcies. Some retailers also may no longer be in business. Updated by: Financial Services Team 5/4/2009
- The Consumers Union Model State Gift Card Law
This legislation would prevent consumers from losing the value on their gift cards.
- Consumer Reports, Viewpoint: Gift Cards
Bah Humbug! When a gift card is no gift Last holiday season, John Houston received a turntable as a gift. He didn’t need it and returned it to Sharper Image, receipt in hand, but the store would only give him a refund in the form of a store credit.
- Protect all your money if your bank fails
Consumer groups call on the FDIC to apply deposit insurance to all prepaid cards, payroll cards, and bank-issued gift cards.
Press Releases
- CU endorses new bill in Congress to ban gift cards with expiration dates, non-use fees
Monday, November 26, 2012 Consumers Union endorses new bill in Congress to ban gift cards with expiration dates, non-use fees Bill closes loopholes and strengthens current federal gift card protectionsWASHINGTON – As holiday shoppers plan to load up on gift cards this season, Consumers Union, the advocacy arm of Consumer Reports, today endorsed a bill Continue Reading
- New credit card & gift protections begin August 22
New regulations will help limit credit card and gift card fees and require banks to re-evaluate interest rate hikes
- Federal Reserve Board urged to limit gift card fees
Consumer groups urge the Federal Reserve Board to limit fees and make gift cards more consumer friendly
- Senate panel passes bill limiting credit-card rates
The bill puts a stop to credit card practices that are misleading and abusive
- CU estimates that 23.3 million Americans haven’t used last year’s gift cards
Among the reasons: gift cards were lost or expired which should make gift-givers think twice.
- Watch out for holiday gift card fees
CU asks Congress to rein in excessive fees and unreasonable expiration dates on gift cards.
Blog Posts
- Gift Cards: Consumer Tips for the 2012 HolidaySeason
Gift cards continue to be a very popular gift giving solution. Before you buy or receive a gift card this holiday season, be sure you know which protections apply to your card, as they may vary depending on the type of card you buy. Most gift cards have limits on expiration dates and fees provided Continue Reading
- CU Comment on CFPB Determination of Effect of Maine and Tennessee Unclaimed Property Laws
Consumers Union filed comments to the CFPB regarding the agency’s determination on the effect of the Electronic Funds Transfer Act and Regulation gift card provisions as they relate to Maine and Tennessee’s Unclaimed Property Laws.
- The Latest Gift Card Advice
In response to consumer inquiries about gift cards, and in light of the holiday season, we thought it’s time for a refresher on existing gift card protections for consumers.
- “E-Gift Cards”: What You Need to Know Before You Buy
Read our information and consumer tips before buying and using ” e-gift” cards.
- Consumers Get New Credit Card & Gift Card Protections on August 22
Consumers seeing benefits of the CARD Act
- Senate debate on financial reform heats up
Now that the Senate floor debate on financial reform has started in earnest, supporters are ofering a number of amendments to strengthen the bill so that it better protects consumers from unsafe financial products and creates new rules to stop banks from getting so big that they could threaten the financial system.
- What do the new gift card rules mean for you?
Starting August 22, 2010, consumers will have additional protections on bank-issued gift cards which are gift cards branded with Visa, MasterCard, AmEx, Discover, and retailer issued which are store gift cards (if your state doesn’t already provide strong retailer issued gift card protections):
- The Latest Development for Gift Cards
but will it help you spend down to the last penny?
Target recently introduced its Mobile Gift Card which allow customers with web-enabled cell phones to use their gift cards at this big retailer. Starbucks also has a similar mobile gift card iPhone application on a trial basis in the Seattle and Silicon Valley areas. - New Gift Card Protections May Be Coming Your Way
Today, we told the Fed what we want for the holidays, and for every other time we give and receive a gift card:
- Consumer Union’s Tips for Gift Cards
CU Staff Attorney Michelle Jun offers practical tips and what to watch out for when it comes to gift cards.
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Stories about Gift Cards
I found that the AMEX gift card I misplaced for a few months had expired and it was worthless.
Nicholas of theTownship Of Washington, NJ
I received a $50 gift card for Christmas. After 6 months, I found that I had approximately $17.50 left and had lost $32.50 in fees or 65%.
Scott of Norman, OK
Three malls in Central Massachusetts are selling their own prepaid cards at holiday time. If not used right away at any of the stores in the mall it automatically reduces in value!
Judith of Worcester, MA
I have received prepaid gift cards that were subject to a monthly fee because they weren’t used by a certain date.
Stuart of Porter Ranch, CA
There was a fee to activate it – and there was no way to tell how much was left – I still have it!
Katherine of Philadelphia, PA
Last holiday season, John received a turntable as a gift. He didn’t need it and returned it to Sharper Image, receipt in hand, but the store would only give him a refund in the form of a store credit.