Who came up with the idea of the gift card? The credit for the concept that has revolutionized holiday giving is often laid at the door of Blockbuster video. Given Americans’ affection for plastic – in the form of credit cards – is it any wonder we’ve embraced replacing paper gift certificates with plastic gift cards?
Some people love them, some people hate them. But neither camp can argue a couple of facts:
- Gift cards are among the most popular holiday gifts. In fact, last year, 57 percent of Americans asked for gift cards, according to the National Retail Federation.
- Gift cards are never the wrong size or color! And as long as you have even just a passing knowledge of the likes and dislikes of the recipient, you can be pretty confident of finding a gift card he or she will like.
- It’s a lot cheaper and easier to mail a gift card than a box. Stuff it in an envelope, slap on a stamp and drop it in the mailbox. You never have to stand in a long holiday line at the post office to mail a gift card.
But what about inactivity fees and expiration dates, you say? What could be worse than finding out that $50 gift card you discovered in the pocket of the coat you haven’t worn since last Christmas is now worth only about $25 thanks to fees?
Turns out, fees and expiration dates are a lot less worrisome for consumers in 2011 than they were in 2008, thanks to the federal Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.
The act limits the fees an issuer can apply to a gift card, and requires the issuer to fully disclose those fees. Issuers are not allowed to hit a card with any inactivity fees until it’s been inactive for at least 12 months. They have to give you at least five years from the date of purchase in which to use the card before it expires for non-use. Plus, after 12 months of inactivity, they can only charge one fee a month.
In addition to the federal regulation, many states have their own laws regarding gift cards. These can vary widely. For example, California and Connecticut go one better on the federal rules, by prohibiting any expiration date for gift cards. The National Conference of State Legislatures has a listing on its website of all state regulations regarding gift cards.
So you can give gift cards with confidence this year, knowing they’ll keep on giving for a long time to come– even if the recipient doesn’t remember your gift until she finds it when she’s changing purses in the spring.