Q. Do Holiday gift cards expire if not used in a certain time?
A. If you are like many, you have likely received a gift card from family or friends in the last few years. Also, like many others the card is likely tucked away in a safe place in your home or office, or simply forgotten about or lost in the shuffle.
If you have a few unused gift cards lying around, you are not alone. The National Retail Federation has reported in a study that 39.1 percent of people gave gift cards this season to department stores, 33.3 percent gave cards to restaurants and 20.8 percent to book stores, online merchants, coffee shops and grocery stores. About 25 percent of Americans still have at least one unused gift card hanging around since December, 2010. Of that group, 55 percent have two or more unused gift cards.
According to Consumer Reports, a high of 27 percent were not redeemed in 2010, but the number is dropping with the passage of improved laws. Better Business Bureau estimates that between 10 to 20 percent of gift cards are never redeemed. One study revealed that last year, $41 billion in gift card went unused from 2006 to 2012, averaging about $6 billion annually. It is estimated that 3.7 billion will go unused in 2013.
The federal government is taking steps to make sure gift cards retain much of their value, even if they remain inactive for longer periods of time to allow consumers more time to use their gifts without being penalized by the card issuers.
Both the U.S. and Canada have recently made changes in federal laws to improve consumers' chances of getting full value out of the cards they buy and give.
These rules generally apply to gift certificates, store gift cards and general use prepaid cards, which are often branded by payment networks such as Visa or MasterCard.
The Credit Card Accountability, Responsibility and Disclosure (CARD) Act, which took effect in 2010, established standards that give consumers additional protections when using gift cards. The standards prohibit retailers from:
Setting expiration dates less than five years after the card is purchased.
Prohibits charging dormancy, inactivity, and service fees if the card has not been used for at least 12 months. If fees are charged after this period, the details of such fees must be clearly disclosed on the card.
These standards apply to store gift cards and general use prepaid cards, which are often branded by payment networks such as Visa, MasterCard and American Express.
Remember that if you are holding a gift card, they are not all created equally and often come with fees. Although gift cards seem like a simple solution for a "hard to buy for" friend or family member, BBB advises that some gift cards carry high fees. If so, they may not be a good deal. Now, if you can just find those gift cards from last Christmas.
Start with Trust. Find more consumer tips at bbb.org.