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GIFT CARDS and GIFT CERTIFICATES

Certificatedfses.pngDid you know that gift cards and gift certificates are among the most popular gifts, not only for Christmas, but also for any gift-giving occasion? The most popular are for merchandise stores, but there are many which are purchased for fast food franchises, restaurants and services like salons. For the eleventh year in a row, gift cards remain the most popular item on wish lists, requested by 61 percent of those surveyed.

However, in many states, non-use of a gift card prior to the expiration or within a set period of time will allow the card to escheat, or be taken by the state as unclaimed property. Pennsylvania does have a law regarding abandoned property and includes language regarding gift cards, but it sets specific limits. There are laws regarding gift cards which were enacted in recent years to protect cardholders.

BE AWARE OF THE EXPIRATION DATE

Most cards have an expiration date, but it varies from each card and also where you may have purchased it. When you let the card expire you can try to use it anyway, but it is up to each retailer or business as to whether they will accept the card or not.

FEES

Some cards have fees for non-use or reduce the total amount of the card if it has not been used for a period of time. For example, a card not used for 12 months may reduce the total by a small percentage.

FEDERAL LAW

In 2009, federal law was put into place. The Credit Card Accountability and Responsibility and Disclosure Act (CARD). This gives some consumer protection for gift cards and is based on state laws throughout the US.

Gift cards cannot expire within five (5) years from the date they were activated and it limits any fees for inactivity, with a few exceptions.

Pennsylvania has an escheat provision which states that payment for a gift certificate or gift card is abandoned if unredeemed for two years or more after the redemption period expires or five years after it is issued, if there is no expiration. Pennsylvania currently has not built upon the federal law, but they can make additional stricter provisions if they choose or looser than the federal provisions. PA also has no provisions regarding expiration dates (i.e, whether they need to be disclosed) and also no provisions regarding fees.

States other than Pennsylvania have provisions requiring disclosure of the expiration, prohibits any fee for non-use, and also that any gift card is redeemable for cash value.

If you give or receive a gift card this holiday season, make sure you use it! More than $1 billion in gift cards goes unspent each year.

and MERRY CHRISTMAS from all of us at Vinsko & Associates.

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