Expiration Date Claims Raise Lawyer’s Ire

Some of the nation’s largest retailers are being accused of violating a 1997 state law by selling gift certificates or gift cards with expiration dates.

A Santa Ana attorney said he is planning to file a lawsuit today in Orange County Superior Court on behalf of eight people who claim they purchased or received gift certificates with expiration dates.

“After [the expiration date], most people throw away the gift certificates without understanding the certificates are good indefinitely under California law,” attorney Neil B. Fineman said.

In all, more than 20 businesses, from large chains to smaller companies, are expected to be named as defendants. They include Target and J.C. Penney.

It has been illegal for retailers to sell a gift certificate containing an expiration date in fine print since Jan. 1, 1997.

“The reason for the law was that people were paying money for a gift certificate, so how could you have it expire?” said Tracey Weatherby, a public information officer for the California Department of Consumer Affairs. “Those who do not comply are breaking the law.”

Weatherby said the department has not kept statistics on the alleged violations because it has received few complaints. “It’s not one of the No. 1 issues we get complaints on or even in the top 10,” she said.

Fineman said most of the expiration dates are printed in small letters and range from three months to two years.

Some of the chains named by Fineman deny that they provide gift certificates with expiration dates.

“I would presume that we are aware of the law,” Target spokeswoman Carolyn Brookter said Wednesday. “We don’t have expiration dates.”

J.C. Penney is not issuing certificates with expiration dates, said spokeswoman Stephanie Brown. She could not say whether the company had issued certificates with expiration dates in the past.

Fineman said some companies attempt to skirt the law by selling gift cards that may not have an expiration date but contain hidden charges.

“What the holder of the card doesn’t realize, unless they read the small print on the back, is that if the card is not used within a specific period of time, the store will deduct a ‘nonuse service charge’ each month from the card until the card is useless,” he said.

Fineman said he will seek an injunction to stop the retailers from continuing to enforce expiration dates and seeks to create a compensation fund for people who have discarded a gift certificate or a gift card they thought was worthless.

The law was passed after similar allegations were raised earlier in the decade.

In 1994, 18 retailers were named in a class-action lawsuit in San Diego County Superior Court for failing to honor gift certificates after expiration dates had elapsed.

In an out-of-court settlement retailers agreed to add language stating that the gift certificates would be honored after any expiration date.

The state Legislature later passed a bill prohibiting the use of expiration dates on these certificates, unless the expiration date is printed on the front of a gift certificate in at least 10-point type. Certificates for food products or charitable donations also are exempt.