​​Gift Card Laws and Policies

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Gift cards, as the name indicates are preloaded monetary gift alternatives that allow the buyer or gift recipient to purchase goods and services at retail stores and other places. Gift cards are divided into two categories: “Retail” or “closed-loop” gift cards and “Bank” or “network” gift cards.



Retail gift cards are issued by a specific retailer or brand and can only be used at that retailer’s store, such as Walmart, Best Buy, or Amazon. Visa, Mastercard and American Express bank cards, for example, can be used anywhere acceptable. Gift cards can be purchased online or in person, with the buyer setting the beginning value.


Laws Regarding Gift Cards

There was a time, consumers used to dislike gift cards because of the confusion around hidden charges, expiration dates, stringent use conditions, and other restrictions associated with the use of the cards. Gift card regulations were primarily left to the discretion of the store or bank issuer, who frequently acted without regard for defined norms or regulations.


New laws governing gift card dormancy, inactivity, services fees, and expiration dates were enacted as recently as 2010 under the Credit Card Accountability Responsibility and Disclosure Act. In essence, gift card issuers are prohibited from charging inactivity costs, such as maintenance fees, balance enquiry fees, and transaction-based fees, until one year has gone since the card was last used. Gift certificates must also be valid for five years from the date of issuing.

What to Look for in the Small Print

Despite the fact that new rules have made gift card policies more transparent, buyers should still read the “small print.” While rules limit the amount of time that shops and merchants can charge fees, it’s crucial to understand what happens once that time has passed.


Here are a few things to check for when purchasing or utilising a gift card.

  1. Dates of expiration: These dates are subject to change. For further information, contact the business or the bank.
  2. Preventing Loss and Fraud Check with the retailer or your bank to see what will happen if your card is lost or used fraudulently. In certain cases, such as if the card has never been used and the initial balance is still intact, many retailers may offer gift card replacement.
  3. PINs (Personal Identification Numbers): Activation PIN codes are required for some bank-issued gift cards. Check with the bank to see what policies they have in place.
  4. Dormancy fees are imposed after a period of inactivity. It’s best to sell your gift cards for cash if you receive gift cards that you do not need from friends or loved ones, instead of letting them go dormant or expire. Do this on a reliable platform like Cardnosh. So when you get a Steam card and you’re not a game freak, this is best for you.
  5. Reloading cash on a gift card: Some retailers allow gift cardholders to reload funds on their cards for future purchases.
  6. E-gift card: An “e-card” is a type of gift card that is delivered to the recipient’s e-mail inbox and can be used in the same way as a physical gift card.
  7. Checking the balance of a gift card online is possible in some cases.
  8. Option for free shipment and delivery: Shipping and/or delivery charges are common with online transactions. You can check to see if the store offers free shipping with your specific card.
  9. Restrictions on use, such as “domestic use only,” limit the card’s use, for instance, to the United States.

Conclusively, speak with an experienced consumer protection lawyer in your area if you believe you’ve been the victim of unfair and deceptive company practices concerning gift cards, or if you have any other consumer-related issues.

Call Bridget Edokwe Esq on 08060798767 or send your email to ngbarrister@gmail.com

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