Hochul’s legislation protects consumers from exploitative gift card practices
The state Division of Consumer Protection released tips to inform and empower New Yorkers purchasing gift cards and gift certificates this holiday season; any gift cards or gift certificates purchased in New York on or after Dec. 10, 2022, will remain valid for a minimum of nine years from the date of purchase. In addition, when the remaining value of a gift card or gift certificate is less than five dollars, the recipient can opt to receive cash for the balance.
All fees are prohibited under the new law, which will prevent gift cards and gift certificates from declining in value. The law specifically forbids the imposition of any “activation fees, retroactive fees, redemption fees, service fees, dormancy fees, latency fees, administrative fees, handling fees, access fees, periodic fees, renewal fees, re-loading fees or any other fee of any kind.”
There is one exception to the law: A gift card or gift certificate that is redeemable at multiple, unaffiliated merchants or service providers may charge a one-time activation fee, not to exceed $9.
“Gift cards offer consumers convenience during the holidays,” said Secretary of State Robert J. Rodriguez. “Thanks to Governor [Kathy] Hochul, gift cards now have a longer shelf life and recipients are afforded more time to find the perfect gift to treat themselves as their gift-giver intended.”
In New York, a gift card or gift certificate’s purchase date determines what, if any, rights exist for consumers. Based on the purchase date, consumers can expect the following legal protections:
| Gift Cards & Gift Certificates Purchased: | Minimum Expiration Date Imposed by Law: | Inactivity Fee Terms: |
| Between September 21, 2004, and August 21, 2010 | No Law Requiring a Minimum Expiration Term. | A monthly inactivity service fee may be assessed monthly after the 12th month of inactivity. |
| Between August 22, 2010, and December 24, 2016 | 5-years from date of purchase before gift card can expire. | A one-time inactivity fee may be assessed after the 12th month of inactivity. |
| Between December 25, 2016, and December 9, 2022 | 5-years from date of purchase before the gift card can expire. | A monthly inactivity service fee may be assessed after the 24th month of inactivity. If the gift card is presented within 3 years of the purchase date, any activity fees assessed will be waived and the gift card will be replenished to its value prior to the fees. |
| On or after December 10, 2022 | 9-years from the date of purchase before the gift card can expire. | Inactivity fees are prohibited. |
Below are tips consumers should keep in mind when buying and using gift cards this holiday season:
- Research retailers before purchase. Verify the legitimacy of the seller. Check reviews and articles.
- Check packaging. When buying a gift card, consumers should make sure the packaging and security seals are intact.
- Use caution with third parties. Consumers should use caution when buying gift cards from third parties or online auctions, as it may be difficult to verify the dollar amount remaining.
- Review the terms and conditions. Before purchasing, consumers should always review the terms and conditions to understand what their recourse is if the gift card is lost or stolen. Companies are required to post terms and conditions either on the card or in attached packaging.
- Beware of scammers. Scammers often seek payment in the form of gift cards, also known as prepaid cards. Government entities, utilities, and other reputable entities will never call you demanding an overdue bill or debt be paid with a gift card.
Consumers having difficulty redeeming a gift card are encouraged to file a complaint with the DCP, which provides voluntary mediation between the consumer and business when the consumer has been unsuccessful at reaching a resolution on their own.
The Consumer Assistance Helpline (800.697.1220) is available Monday through Friday from 8:30 a.m. to 4:30 p.m., excluding state holidays, and consumer complaints may be filed HERE. The DCP may also be reached via Twitter and Facebook @NYSConsumer.