The holidays are a festive time to gather with family and friends to eat, watch winter sports on television, and exchange presents. While some have resorted to Internet shopping, many still brave the malls and superstores in search of the perfect gift. Then there are the other factors…the right size, color, and amount of money spent on the gift. For some of us, there’s only one thing we hate more than fighting the crowds to get our shopping accomplished before the holidays: waiting in the mile-long return lines after the holidays. That’s why the gift certificate or gift card is becoming the most appealing gift. The recipient can always use it, you don’t have to worry about it being the right size, and it’s cheap to mail. However, these little devises seem to pose many questions in the minds of the purchasers. Do they expire? Can they be used for anything? What happens if the item you buy is less than the full certificate amount?
Illinois’ Consumer Fraud and Deceptive Business Practices Act says a gift certificate is proof a person has paid for and is entitled to goods or services from the issuing business or entity. Phone cards, purported gift certificates usable with multiple sellers of multiple goods, purported gift certificates for which no payment was given, any certificate given at bulk for less than full value or as a part of a rewards program, certificates issued for a food product, etc., aren’t gift certificates by definition under Illinois Statutes.
Do Gift Certificates Expire?
While some states have passed laws regarding an automatic expiration to gift certificates after a specific period of time has passed, Illinois isn’t one of those states. Illinois law provides that “any gift certificate subject to an expiration date must contain a statement clearly and conspicuously printed on the gift certificate stating the expiration date. The statement may appear on the front or back of the gift certificate in a location where it is visible to any purchaser prior to the purchase.” The only exception to having the expiration date printed on the certificate is if the certificate has a toll-free number on it and a statement clearly and conspicuously printed on the gift certificate stating that holders can call the toll-free number to find out the balance on the gift certificate, if applicable, and the expiration date. By implication, then, the law indicates gift certificates that don’t have a clearly visible expiration date printed somewhere upon them don’t expire.
Can a Store Charge Fees For Unused Certificates?
The short answer is no, not without disclosing such at the time of purchase. Illinois law provides that “any gift certificate subject to a fee must contain a statement clearly and conspicuously printed on the gift certificate stating whether there is a fee, the amount of the fee, how often the fee will occur, that the fee is triggered by inactivity of the gift certificate, and at what point the fee will be charged. The statement may appear on the front or back of the gift certificate in a location where it is visible to any purchaser prior to the purchase.”
Can Certificates Be Used For Anything?
State law suggests gift certificates are to be treated as prepaid compensation. Therefore, that compensation should be able to be used for any item the seller sells.
What If You Don’t Use the Full Amount?
Most of the time, the store will either refund you the difference between the amount of the gift certificate and the amount of purchase with the certificate, or the store will give you a store credit for the remaining amount. Where magnetic gift cards are used, frequently the remaining balance stays on the card until it’s applied toward a purchase.
However, the legislature has indicated, by its recent proposed bills, a potential change to the act. There’s a bill pending in the Illinois House of Representatives, and, while it’s likely to be passed over this legislative term, it may resurface in the near future. It proposes substantive changes to the Consumer Fraud and Deceptive Business Practices Act, which contains most of the provisions discussed herein. If the amendment to the act is passed as currently written, the act will provide that no person shall: refuse to honor a valid gift certificate; reduce the value of a gift certificate, except when the holder of a gift certificate partially redeems the gift certificate as payment for goods or services; or sell a gift certificate that’s subject to an expiration date. It also will provide that upon the presentation of a gift certificate, the issuer shall disclose to the holder the date on which the gift certificate was issued and the remaining balance of the gift certificate.
While the aforementioned may be positive additions to the existing law, the new bill also suggests it would delete language requiring a gift certificate subject to an expiration date to contain a statement clearly and conspicuously printed on the gift certificate stating the expiration date, which is arguably the elimination of a consumer safeguard aspect of the law. IBI