The Gift Cards Will Keep On Giving - McConville Considine Cooman & Morin, P.C.
As the gift-giving holidays come to a close, many of us find ourselves in possession of one or more gift cards. The cards are becoming increasingly popular: in 2015, a survey of American consumers found that 93% of respondents had either given or received a gift card, and industry experts project that by 2018 the total volume of gift cards will reach or exceed $160 Billion.
In prior years, consumers were sometimes surprised to learn, after some delay in accessing the benefits of the gift card, that significant portions of the face value had been lost due to "service fees," or that the gift card had even expired.
The specter of that unpleasant surprise is no longer a concern in light of legislation passed in New York State just before the 2016 holiday season. Under the new law, service fees cannot be charged to unused gift card balances until 25 months after issuance of the card, and any monthly service fees that are applied before the 36th month must be waived if the card is used within three years of the date of issuance. The law also mandates that all gift cards' terms and conditions describe the exact procedure for replacing a lost card, and none expire before five years from issue date.
At the time the law was enacted, Governor Andrew Cuomo explained: "These new protections will help prevent New Yorkers from being nickeled and dimed by hidden costs and fees. No one expects an asterisk when buying a gift card and I'm proud to sign this legislation to help ensure consumers get their money's worth."
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