When it comes to expiration dates, unknown to many consumers, most gift card funds do not expire. Consumers often assume that once their physical gift card has expired that the underlying funds have expired as well, which is not the case. This legislation protects consumers by lengthening expiration dates on gift cards to at least 9 years – 4 years greater than required by the Federal Credit Card Act of 2009, thereby providing substantial additional time for consumers to continue using the same card. This reduces the likelihood that consumers will fail to redeem funds because of confusion over expiration of underlying funds, and helps them bypass the extra effort of requesting a new card for another four years.
Some gift cards also come with nuisance fees. For instance, dormancy fees penalize consumers for not using the card frequently. The law bans all fees on gift cards other than a one-time initial activation fee on“open loop” gift cards (gift cards that can be used anywhere rather than at specific merchants or service providers).
Senator Shelley Mayer said: “When consumers buy gift cards, they are trading their hard-earned money for the promise of a good or service in the future. I am pleased we are tightening the law to limit the loss of value that consumers experience with gift cards by improving consumers’ access to their entitled funds. Thank you to Assemblyman Nader Sayegh for sponsoring this bill in the Assembly and to Governor Kathy Hochul for signing it into law.”
Assemblyman Nader Sayegh said: “It’s just wrong to receive a gift card or gift certificate only to learn later that the value of the gift has automatically declined in value over time, or expired before it was used. That is why I introduced this legislation to prohibit all fees on gift cards and certificates purchased in New York and to greatly extend expiration dates. I thank Senator Shelley Mayer for winning passage of this bill in the Senate, and thank Governor Kathy Hochul for signing the bill right in the heart of the holiday shopping season.”
