Monday, November 26, 2012
Bill closes loopholes and strengthens current federal gift card protections
The Gift Card Consumer Protection Act, introduced by U.S. Sen. Richard Blumenthal of Connecticut, would also prevent companies that file for bankruptcy from selling gift cards and require them to accept and honor unredeemed gift cards. Currently, if you get a gift card from a retailer that declares bankruptcy, the prospects of redeeming it range from slim to none.
Blumenthal said these protections would significantly strengthen present law, which permits expiration of cards after five years, and non-use fees after one year. The new bill would bar such deadlines and fees at any time.
In addition to these reforms, the bill would extend gift card protections to certain types of cards that current federal protections do not cover, including loyalty, reward, and promotional gift cards, such as cards you redeem with credit card points.
Pamela Banks, senior policy counsel at Consumers Union said, “You deserve to receive the full value of your gift card. You ought to be able to use it whenever you want without fear that the card has expired or is no longer accepted. This bill would be a welcome present for any consumer who’s been short-changed by gift cards.”
Michelle Jun, senior staff attorney at Consumers Union, said, “Gift cards may offer a simple solution for the hard-to-buy people on your list. But a gift card may have hidden fees and expiration dates in the fine print, depending on the card. The value of a card may drop, or disappear. This bill takes aim at some of the biggest problems we’ve found with gift cards.”
A recent national survey by Consumer Reports found 46 percent of holiday shoppers plan to buy gift cards this season, although 15 percent said they still had at least one unused card of their own from 2011.