CONSUMER ALERT: GIFT CARDS COME WITH PROTECTIONS FOR CONSUMERS

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November 28, 2012

LITTLE ROCK - Every holiday shopper has that family member or friend that is difficult to buy for, which is one reason why gift cards are increasingly popular each year. Gift cards are some of the most requested Christmas gifts, as well, since recipients can shop for the items they want.

According to the National Retail Federation, about eight in 10 American consumers will buy gift cards this year from businesses like department stores and restaurants, spending a total of nearly $30 billion.

Arkansas's Fair Gift Card Act was enacted in 2007 to protect gift card purchasers and recipients from improper fees and untimely expiration dates. Today, Attorney General Dustin McDaniel issued this Consumer Alert to inform consumers about the state law and federal safeguards related to gift cards and gift certificates.

"Our state was among the first in the nation to recognize that gift-card buyers and recipients needed greater protections, and that's why our office was instrumental five years ago in supporting the legislation that addressed the problem," McDaniel said. "Now, with additional federal regulations, consumers can be confident buyers this Christmas."

Consumers have the following protections under the state law and federal rules:
• The expiration date on gift cards must be clearly disclosed, and the expiration date must not be fewer than five years from the date the card was purchased, or from the last date any additional money was loaded onto the card.
• Card issuers cannot charge any fees for inactivity unless the card has not been used for two years.
• Any additional fees must be clearly disclosed on the card or its packaging.
McDaniel offered this advice to gift card buyers:
• Purchase gift cards from trusted businesses. Avoid buying from Internet auction sites to protect against buying counterfeit or fraudulently obtained cards.
• If there is an additional fee to purchase the card, or other terms and conditions that may not be acceptable, then shop elsewhere.
• Keep receipts so that the recipient can verify the purchase in the event the card is lost or stolen.
• Make sure the retailer or restaurant issuing the gift card is financially stable. Cards purchased from businesses that close or file for bankruptcy may lose their worth.
McDaniel encouraged gift card recipients to read the card's terms and conditions and be aware of the expiration date or the possibility of any additional fees. If, after a period of nonuse, it appears that the card has expired or fees have been deducted, contact the card issuer. The issuer may opt to honor the card or reverse the fees.

Recipients should always keep the original purchase receipt and the card's ID number in a safe location. To avoid misplacing or forgetting about the card, use it as soon as possible. Report a lost or stolen card immediately to the issuer.

If there are problems with a gift card, contact the issuer. If the problem cannot be resolved, consumers may contact the Federal Trade Commission at www.ftc.gov (for cards issued by retailers) or the Comptroller of the Currency's Customer Assistance Group (for cards issued by national banks) at (800) 613-6743.

In addition, consumers may contact the Attorney General's Consumer Protection Division at (800) 482-8982 or visit the Consumer Protection Division's website, www.GotYourBackArkansas.org.

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