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Feb 26, 2009 08:56 AM

Gift cards w/ expiration dates - shady practice?

I had breakfast today with a friend. He treated because he had a gift card that he'd had for a while. He had used it several times before but still had a $50 balance left on it. The server took the check presenter w/ the gift card and returned a few moments later to advise us that the gift card had expired last month(one year expiration). My friend advised that he wasn't are of an expiration date. The server pointed out some very fine print wherein their was an expiration date.

The server advised that he would consult the owner to see if he would honor it and fortunately they agreed to because of "the economic times" but he made it clear that they "were under no obligation" to do so.

I find it shady that restos, and other retail stores, would place an expiration date in fine print on their gift cards. It's as if they are hoping you don't read the fine print and don't cash in on the gift card and therefore they get "free money". I worked for a local resto and they decided to make the switch from gift certificates to gift cards and we explored all options w/ the card manufacturer. They went over wording that can and/or should be included on the card and one of the things we discussed was an expiration date. They offered statistics on how many purchased gift cards are actually used and also which ones w/ expiration dates are allowed to expire and how much that benefits your bottom line. Again, I find it shady. I understand that no expiration date can complicate bottom lines but, really... Incidentally, the resto I was with opted NOT to print the cards with an expiration date.

Here is a link to a website that lists state gift card laws. Interestingly, many states prohibit expiration dates w/i 2-7 years.

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  1. A few years back, when gift cards were becoming very popular, our local news ran a story warning about this, and it happens in all types of cards, not just restaurants. Now, whenever I purchase a card for a friend I carefully read every single bit of it. Some will even tack on a service charge, so we have to do our homework. Of course it's shady, but that's they way they make money.

    1. The other sneaky thing some retailers do is charge a fee on 'inactive' gift cards so the balance runs down before you get a chance to use it.

      Back in 2007 the Ontario provincial gov't passed a law eliminating expiry dates and various fees on gift cards. I was very happy to see that happen. In Ontario, retailers are also supposed clearly outline any restrictions when you are purchasing a card.

      1. I'm pretty sure that it is illegal in California.

        3 Replies
        1. re: Missmoo

          I'm pretty sure, too. I recently found a 10 year old gift card for a nursery. $15 bought fewer plants now than it would have a decade ago, but they still honored the card. (On the other hand the $25 gift card for a bookstore that's gone out of business is pretty useless.)

          1. re: Glencora

            Do you know if the same law applies to gift certificates?

            1. re: latindancer

              “Gift Card” or “Gift gift Certificate, ” the issue of no expiration dates and being able to return it for cash or for another gift, etc., is a great law but really…. Never buy or accept these crappy "gifts” in the first place. I say that because I have had too many meals ruin because of arguments about "the law" with the manager or being told the $50 card was never activated by the person who took the money from my friend who gave me the "Gift." The way I now look at these "gifts" is that the "friend" or relative giving it to you is saying, "I so did not want to spend my time looking for something special for you so I just got you this crappy card so you can go have an argument about the law with someone over it."

              Here is some legal language to chew on. Note that the language refers to something being “sold” as opposed to something a person or entity might issue as a promotion item. I have never looked for any case law on how this, or more recent amendments and sections, has been applied but that might be worth looking for also.

        2. such a weird practice, as the money has already been handed over! money given for no service is not an understandable concept to me... it is not as if inflation has increased so much as to make the 50$ paid equal 5$... it should be honoured.

          1. Good link, LL! Thanks to Attorney General Blumenthal in CT, we are "safe" in CT, but with so many places going out of business, I'm all for giving cash instead of a gift card at this point, just so you don't risk losing the $ altogether.


            And on another fine print note, I had received a Visa gift card ("good as cash") and made the mistake of calling the toll-free number on the card to check the balance and was charged a fee for it. Sure, it's in the fine print somewhere, but when there's an 800 number written right on the card, why would you think it cost anything to check the balance? Shysters.

            3 Replies
            1. re: kattyeyes

              Called an 800-# to check the balance and you're charged a fee? Yikes, that 's just plain dirty too. I guess on the upside of things, it makes me appreciate all themore the establishments that don't use expirations or charge ridiculous fees.

              1. re: lynnlato

                The saving grace is there are many restaurants. So I will just go some where else.
                Mess with me once, shame on you, mess with me twice, shame on me.
                You would think in this market they would bend over backwards to keep a customer?

              2. re: kattyeyes

                Don't feel like you're being picked on as a consumer. I recently sold a retail business, in California, that sold gift cards handled through our merchant services (credit card) provider. They had no expiration per the law here. However....... it cost us a 35 cent transaction fee to run the card to see how much was on it. It would happen most often when someone would come in with a gift card and didn't know how much it was for. 35 cents for me to find out! Because of that I thought about a minimum amount it made sense to put on a card for a customer but decided it was just a cost of providing the service. Pretty annoying.