Some Cheerful Holiday Thoughts on Gift Certificates

Gift Certificate
These snow demons are fixin’ to break the law.

Gift certificates are great holiday gifts. Sure, they kind of say, “I care about you, but not enough to, you know, shop for you.” But they’re just so convenient. Your brother-in-law with an undergrad economics degree who answers phones for a living now might argue that gift cards reduce the deadweight loss associated with presents. His argument sounds plausible! That plus laziness is why I get mom a Maker’s Mark gift card and a box of cigars every Christmas.

But gift certificates and gift cards have given rise to some urban legends over the years. One is that gift certificates can’t expire. (This is not exactly true.) Another is that if you read the terms and conditions of an Amazon gift card in front of a mirror, Jeff Bezos will appear and do your bidding. (This is true, but dangerous.)

So here’s the deal: Under Virginia’s Gift Certificate Disclosure Act, every gift certificate needs to state either (1) its expiration date or (2) provide a phone number or internet address where the holder of the gift certificate can get information about the expiration date. A gift certificate issued by a Virginia merchant that diminishes in value over time must provide and internet address or phone number where the holder can get information about the current value of the gift certificate. For purposes of this law, a gift card is a gift certificate.

A violation of these rules is a breach of the Virginia Consumer Protection Act, which can allow an injured party to recover triple damages and attorney’s fees.

And under the federal Credit Card Accountability Responsibility and Disclosure Act–the CARD Act, get it?–a gift card or gift certificate generally cannot expire within five years from the date it was issued. The CARD Act also limits dormancy fees.

So there you go. Gift cards are reasonably safe and way easier than a real present.

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