Remember to read the fine print on gift cards this holiday season-- that's the warning from the state comptroller Tom DiNapoli.
To cut down on scams, the Attorney General's Office and big retailers like Walmart, Best Buy and Target have implemented the following changes:
- Reducing the total amount that a consumer can purchase in one transaction in store-branded gift cards.
- Reducing the dollar limit that can be loaded on a store-branded gift card.
- Placing restrictions on the redemption of store-branded gift cards, including prohibiting the redemption of store-branded gift cards for other gift cards.
- Enhancing employee training to help employees identify the warning signs of gift card scams and warn potential victims when appropriate.
While some gift card sellers have done away with inactivity fees, consumers should still ask whether fees apply when purchasing a gift card.
DiNapoli said New Yorkers should use their gift cards within a year of purchase to avoid inactivity fees and register cards with the retailers.
Under the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, many types of retail gift cards sold after August 22, 2010 are not permitted to charge inactivity fees unless the card has been inactive for at least 12 months.
All terms and conditions for a card must be disclosed directly on the card and gift cards cannot expire within the first five years after purchase.
Gift cards may have terms and conditions that can decrease the value of the card. These may include charging:
- Service fees when the card is purchased.
- Dormancy fees if the gift card is not used within a certain period of time.
- Fees to call and check the balance remaining on the card.
- Replacement fees for lost or stolen cards.
Financial advisor Rick Reagan always recommends giving cash as a gift-- that way, you don't have to deal with the fine-print hassle, and don't have to worry if a small business is no longer in operation.
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