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“Last year my office received over $13 million worth of unused [gift] cards,” Comptroller DiNapoli said.
By Forum Staff
Read the fine print on gift cards for details about fees and expiration dates, State Comptroller Tom DiNapoli warned Monday.
According to the State’s fiscal watchdog, while some gift card sellers have eliminated inactivity fees, consumers should still ask whether fees apply. DiNapoli also reminded recipients to spend their new gift cards in a timely manner; otherwise the money could eventually get turned over to the Office of Unclaimed Funds.
According to DiNapoli, after five years of dormancy, money from unused gift cards issued by New York businesses is turned over to the State Comptroller’s office as abandoned property. Under the federal Credit Card Accountability Responsibility and Disclosure Act of 2009, many types of retail gift cards sold after Aug. 22, 2010, are not permitted to charge inactivity fees unless the card has been inactive for at least 12 months. All terms and conditions for a card must be disclosed directly on it and gift cards cannot expire within the first five years after purchase. New York law provides that gift cards cannot be assessed a monthly service fee against the balance prior to two years or the 25th month of inactivity.
Since January 2011, DiNapoli noted, New York has required companies offering rebates to disclose whether they will be issued in the form of a gift card and whether any fees will apply to those cards. Rebate cards are not all covered by the same rules as regular gift cards, so this disclosure helps consumers to identify the different cards and how they can be used, the comptroller added.
DiNapoli also noted that gift cards may have other terms and conditions that can decrease the value, such as: service fees when the card is purchased; dormancy fees if the gift card is not used within a certain time period; fees to call and check the balance remaining on the card; and replacement fees for lost or stolen gift cards.
“After the holiday season wraps up, many New Yorkers tend to forget or lose track of their gift cards,” DiNapoli added. “Last year my office received over $13 million worth of unused cards. As a rule of thumb, New Yorkers should register the card with the retailer and use gift cards within a year of purchase to avoid inactivity fees.”
The Comptroller’s Office is currently holding more than $16 billion in unclaimed funds. On Monday, DiNapoli urged New Yorkers to see if they are owed money by visiting osc.state.ny.us. He later pointed out that banks, insurance companies, corporations and the courts are among the many organizations required by law to report dormant accounts to the State Comptroller. These organizations must attempt to notify you by mail and publish the information in newspapers. Despite these efforts, many funds remain unclaimed and are turned over to the State Comptroller.
Some types of unclaimed funds accounts include: bank accounts (savings, checking and CDs); court funds; dividends; estate proceeds; insurance benefits/policies; stocks, bonds, mutual funds; telephone/utility/security deposits.
