I just bought a dear friend a gift card for a massage from a local health club and spa. Right after I paid for it, the saleswoman warned me that my present will expire in six months. I promptly asked the woman if she was aware that the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act) made such a rule illegal. She had no idea what I was talking about.
Back in August 2010, the Credit CARD Act made it illegal for gift cards to expire within five years of their issue date. The law covers retail gift cards for goods or services and network-branded gift cards, which are redeemable at any merchant that accepts the card brand. The only exceptions are for promotional gift cards and paper gift certificates.
I decided to call the corporate offices of Equinox to see if the information I was given about their gift cards was outdated. It turns out that it was. A spokeswoman for the health club told me that their cards no longer carry any expiration date. I feel better knowing that my friend won't have a problem redeeming her massage. But I hope the company educates its employees about its policies before she books her appointment.
Are there other companies out there that are having trouble getting the word out to its employees about the Credit CARD Act? As for the major retailers and the financial companies that issue MasterCard and Visa gift cards, those firms appear to be in compliance, says John Ulzheimer, president of consumer education at SmartCredit.com. But there's always the chance that consumers will run into someone at a cash register who isn't familiar with the new laws.
What should you do if a salesperson tells you that the gift card you received at Christmas is about to expire? You could always print the law off the government's website and prepare yourself for a fight. But it may just be easier to escalate the issue to a manager and then a company's corporate office until you find someone who is better informed. If that doesn't work, you can always contact the Federal Trade Commission.
Despite my annoying experience, I'm still a fan of giving gift cards. But next time I'll make sure to ask about any rules or limits before I hand over my credit card. Also, here's a list of merchants from Bankrate.com that make it especially easy to give and use gift cards the next time you feel like spoiling someone in your life.
Stacey Bradford is the author of The Wall Street Journal Financial Guidebook for New Parents.
Gift Cards image courtesy of Flickr, CC 2.0.