October 12, 2007

Analysis of KPIX CBS5′s ConsumerWatch Story on Gift Card Loopholes

On October 9, 2007, KPIX CBS5 aired a segment and provided an article on loopholes in California law that allows gift cards to expire. As with most news segments now a days, the factual information was pushed to the end of the segment. Surprisingly, the website article failed to mention what those loopholes are. Instead the website article instills the reader with confidence that gift cards in California cannot have an expiration date. What the article failed to mention (but included in the news segment) was that gift cards in California can have expiration dates if it is:

  1. Prepaid calling cards.
  2. Promotional, awards or loyalty gift cards.
  3. Gift cards sold as a fundraiser.
  4. Grocery gift cards. Gift cards issued for perishable food product.
  5. Bank gift cards.

Even the video news segment failed to mention that prepaid bank debit gift cards can have a expiration date. A careful examination of California’s Gift Card FAQ states that “A gift card that can be used with multiple unaffiliated sellers of goods or services may contain an expiration date. If so, the expiration date must be printed on the card”. This essentially covers prepaid debit gift cards provided by Visa, MasterCard, American Express and Discover.

Unfortunately, California’s gift card laws are no longer the vanguard, but riddled with expiration loop holes and other exemptions. While, we applaud CBS5 for educating consumers, they failed to disclose that bank debit gift cards can also expire in California.

Loopholes Place Expiration Dates On Gift Cards [KPIX CBS5]
FAQs and Tips on Gift Certificates and Gift Cards: Legal Guide S-11 [California Dept. of Consumer Affairs]

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Readers' Comment (1) | Posted by Alex | Filed under: Analysis, Laws & Terms

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