Some gift cards do expire
Mary Lou O'Connor's $25 gift card had been just collecting dust in her West Hartford home for the past four years.
O'Connor was in no rush to drive across the Connecticut River to spend the card she received as a birthday present for the Promenade Shops at Evergreen Walk in South Windsor. She believed that under Connecticut law gift cards don't expire.
Now that she is retired she recently took a drive out to South Windsor to be told that her card had a zero balance even though she had not cashed it. O'Connor was told that Connecticut law only provides protection against expiration on cards issued by Connecticut businesses.
She then took a closer look at the back of the card, which in small print said "a $ 2.00 fee will be deducted each month from the Card balance starting 12 months and 1 day after the Card Activation date."
She asked CtWatchdog whether that was legal.
"Please let me know if I have any recourse. I would like to spread the word and warn other consumers of this practice because I was surprised that this is legal. It certainly is not a good public relations practice," she told CtWatchdog.
Unfortunately the card is not worth anything and she has no recourse. Connecticut Consumer Protection Department spokeswoman Claudette Carveth explains that there are two sets of laws that apply to gift cards sold in Connecticut.
Gift certificates and gift cards that are sold by local businesses in Connecticut - like gift shops, beauty parlors and restaurants - are protected against expiration dates or inactivity fees as long as they are backed by Connecticut firms.
However, cards issued or backed by federal financial institutions or firms from other states carry no such protection. Such is the case with the card purchased at The Promenade Shops, which is issued by a Kansas company, StoreFinancial.
These cards are covered by federal laws, which say that any card issued on or after Aug. 22, 2010 may not expire within the first five years from the date it was issued. Also, no fees can be charged in the first year.
But, after 365 days, monthly fees can be charged as long as it is disclosed to the purchaser. And that is what happened in O'Connor's case.
"It's deceitful," said O'Connor. "It is legal but unethical."