Gift cards: More tips on using plastic

This article was originally on a blog post platform and may be missing photos, graphics or links. See About archive blog posts.

Thinking of giving gift cards for Christmas? Keep in mind that some of them come with expiration dates or fees that can significantly reduce their value. There are basically two categories of gift cards: those that can be used at multiple, unaffiliated businesses and those for use only at a single business.

Multiple-business gift cards can come with purchase fees, monthly fees, inactivity fees, transaction fees, balance-inquiry fees and replacement fees. They can also have an expiration date. All fees and restrictions must be disclosed, according to the California Department of Consumer Affairs, so look at the fine print when considering these cards. California requires that any expiration date be printed on the card itself.

Single-business gift cards, on the other hand, come with important consumer protections in California. They cannot have an expiration date and, in most cases, you cannot be charged a service fee. The business can only assess a “dormancy fee” for non-use if the value on the card is less the $5 and the card has not been used in two years. Gift cards or gift certificates for food items can have an expiration date, as long as it is printed in 10-point type on the card or certificate.

Another plus for the single-business gift cards: Under a state law that went into effect this year, if the value of the card is less than $10, the business must allow you to exchange it for cash.

Given the current economic climate, here’s a warning: If a business declares bankruptcy, its gift cards are pretty much worthless, unless the holder wishes to file a claim against the bankruptcy estate.

For more information on gift-card rules or if you have a complaint, contact the Department of Consumer Affairs at (800) 952-5210.

-- Scott J. Wilson