December 22, 2015

Bolinsky: Gift Card Tips this Christmas Season

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Gift Card Tips

It’s that time of year when many people begin thinking about purchasing gifts, including gift cards, so it’s important to remember your rights and responsibilities for gift card purchases.

First, there are two sets of Connecticut laws that apply to gift cards: (1) cards that are sold in Connecticut and are NOT backed by a federal financial institution are covered under Connecticut state law; and (2) cards that are sold in Connecticut and ARE backed by a federal financial institution are covered by federal law.

To determine if a card is backed by a federal financial institution, visit the Connecticut Department of Banking website.

Gift cards issued by Connecticut retailers will most likely be covered under Connecticut state law. If Connecticut state law applies, gift cards may not have an expiration date or an inactivity fee.

Neither federal nor Connecticut gift card laws cover reloadable, pre-paid cards. Reward cards and pre-paid calling cards are not covered, either.

When buying a gift card, make sure you know what type of card you are buying. Buy only cards that clearly disclose information about the initial cost, monthly fees and the expiration date. If a card doesn’t disclose information about fees and expiration dates, consider purchasing a different card.

When receiving a gift card, try to spend the entire balance as soon as possible, as you will be more likely to use all of the card’s value. You’ll also reduce your chances of losing some or all of the value of the card if the issuer goes out of business. Also, keep track of your balance. Some gift card issuers provide information online about your card balance.

Shopping Online This Season

The Federal Trade Commission has these simple rules to follow if and when you conduct any online credit card transactions:

Know who you’re dealing with. Confirm the online seller’s physical address and phone number before you buy. It comes in handy if you have questions or problems later.
Know what you’re buying. Read the seller’s description of the product, and read the fine print!
Check out the terms and conditions. Can you return the item for a refund if you’re not satisfied? Who pays the shipping costs? Is there a restocking fee? Print and save records of your online transactions, including all emails to and from the seller.
Only buy gift cards from sources you know and trust. Avoid buying gift cards from any online auction sites because the cards could be fakes.
Be stingy with your personal information. Don’t give out your credit card or other financial information in exchange for any offer of the newest tech toy, a free gift card, a seasonal job or a holiday vacation rental.
Don’t e-mail your financial information. Email isn’t a secure way to transmit numbers—your credit card, your checking account, or your Social Security number.
Don’t click on a link in an e-mail. Legitimate companies don’t ask for your financial information via e-mail or pop-up message.
Check the privacy policy. It may be long, but it can give important information: for example, what personal information the website collects, why, and how the operators are going to use it. If you can’t find the privacy policy—or understand it—consider taking your business elsewhere.

For more online shopping tips, download the Federal Trade Commission’s “9 Online Shopping Tips”.