ALBANY – ‘Tis the season to buy your family and loved ones gifts for the holidays, but if you run out of ideas, you can always get a gift certificate or card.
A new law signed by Governor Kathy Hochul extends the expiration date on gift cards and gift certificates and outlaws additional charges such as nuisance fees. The law was sponsored by State Assemblyman Nader Sayegh (D-Yonkers) and State Senator Shelley Mayer (D-Yonkers). The law goes into effect in one year from now, on December 10, 2022.
Sayegh noted that consumers have long complained about gift card nuisance fees, small print limitations, difficulty in spending the last few dollars and cents, and impressions that the cards have expired, which means they stay unused or partially used, sometimes for years. This new law enhances consumer protection to make it easier and less expensive to use these cards and gift certificates.
When it comes to expiration dates, unknown to many consumers, most gift card funds do not expire. Consumers often assume that once their physical gift card has expired that the underlying funds have expired as well, which is not the case.
This legislation protects consumers by lengthening expiration dates on gift cards to at least nine years; four years greater than required by the Federal Credit Card Act of 2009, adding extra time for consumers to continue using the same card.
The law bans all fees on gift cards other than a one-time initial activation fee on “open-loop” gift cards such as prepaid debit cards that can be used anywhere.
The law will also allow consumers to avoid getting stuck with a small amount of remaining value on a store-specific gift card, which often goes unused, by allowing consumers to exchange store-specific gift cards with remaining balances of less than $5 for cash.
“It’s just wrong to receive a gift card or gift certificate only to learn later that the value of the gift has automatically declined in value over time, or expired before it was used,” said Sayegh.
“When consumers buy gift cards, they are trading their hard-earned money for the promise of a good or service in the future.,” said Mayer. The new law will “limit the loss of value that consumers experience with gift cards by improving consumers’ access to their entitled funds.”
