By Catherine Blinder
Does Uncle Gaspar still love anything related to soccer? Does your sister Angela still collect mugs with owls on them? What size is your big brother now? What about all the nieces and nephews who loved your gifts of books and toys when they were little, but now that they are suddenly teenagers, are only interested in electronics that you can’t even pretend to understand!
Although a well-selected gift is a precious thing, and in many families, a gift of cash is perfectly acceptable and customary, there are other times a gift card seems like the perfect solution, hoping the recipient will be able to choose something that they really want and can use.
It’s not that simple though. There are two sets of laws that can apply to gift cards – federal and state. Gift cards that are sold in Connecticut by retailers, restaurants or service providers that have stores in the state are generally covered by state laws. Likewise, cards that are sold online or on the phone for these types of stores and shipped to Connecticut are generally subject to state laws. In the state, gift cards do not expire and there are no fees.
Cards that are issued by a financial institution or a mall, on the other hand, would fall under the federal laws. These kinds of cards allow for more flexibility because they can be redeemed by different establishments. They can, however, have expiration dates and fees applied. (Pre-paid phone cards and other re-loadable cards are not covered by these laws.)
In addition to deciding what type of card you want – a gift card for a specific store or a more general card issued by a bank – you should consider what form you want the gift card to take. For those tech-savvy recipients on your list, you can order a gift card online or by phone and have it delivered directly to their smart phone. There is no chance of loss that way, and people are much more likely to redeem it quickly, often through the Internet. By comparison, a physical gift card is just like cash – if you lose it, you have no recourse.
If you are the lucky recipient of a gift card, be sure to use it quickly. It is estimated that nearly a quarter of all physical gift cards are unredeemed a year after receiving them, and between ten and twenty percent are never redeemed at all. Or like many of those unlucky people who received Radio Shack gift cards last year– if they missed the fact that the store filed bankruptcy soon after the holidays, they were left holding a worthless card and broken dreams of upgrading their phone!
If you receive gift cards please be aware of the following things:
- Although gift cards don’t expire, sometimes a store does, so redeem them quickly!
- Try to spend the entire amount on the card as soon as possible before you lose track of the card or your remaining balance.
- Groupons are not gift cards. A groupon is a coupon and the holder gets the value of amount purchased if the offer expires. If the business expires, Groupon provides a refund.
So shop wisely, and redeem quickly if you are the lucky recipient of a gift card to your favorite store, but no matter how that gift came to you, remember to send a heartfelt thank you!
Happy holidays from all of us here at the Department of Consumer Protection, and we wish you a safe and happy New Year.
This article was written by Catherine Blinder, chief education and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at www.ct.gov/dcp.