Sen. Farley Warns Consumers To Completely Check Out Gift Cards Before Purchasing

Hugh T. Farley

December 26, 2007

With holiday shopping underway, State Senator Hugh T. Farley (R, C - Schenectady) reminds consumers about their rights under New York State’s Gift Card Law.

"Gift cards are a very popular purchase that individuals make for loved ones and friends, but consumers need to know their rights in order to protect their gift card from being diminished by hidden fees," said Senator Farley. "The law requires companies to disclose any terms or conditions that apply to the gift card, ensuring that consumers know the facts before they make their purchase."

Consumers have the following protections under New York State’s gift card law:

* Companies may not impose any retroactive fees against the balance of a gift certificate or gift card.

* Businesses may not impose any monthly service fees to the balance of a gift certificate or gift card until the thirteenth month of non-use. Each time the card is used or has value added to it, the consumer has a new thirteen month period before any monthly service fees can be applied.

* Companies must post a sign informing consumers if terms and conditions are applied to their gift cards or gift certificates.

* These posting requirements do not apply to gift certificates that are sold below face value at a volume discount to employees, to nonprofit and charitable organizations, or educational institutions for fundraising purposes; or distributed by the issuer to a consumer pursuant to awards, loyalty, or promotional programs.

* Companies that offer gift cards or gift certificates through the mail, phone, or internet must tell consumers that terms and conditions are applied to gift cards/certificates before they make their purchase.

* Certain terms and conditions must be clearly printed on the card/certificate, including expiration dates, fees charged against the balance of the gift card/certificate, and whether a replacement card will be issued if the gift certificate is lost, stolen, or destroyed.

* Any additional terms and conditions can be printed either on the card, on the card’s packaging, or on a separate printed document included with the card, along with a toll free number that the consumer can use to access additional information.

* The Attorney General can bring legal action against any company who is believed to be in violation of this law. If found guilty, the courts may impose a civil penalty of up to $1,000 per offense and may order restitution for the consumer.