New federal rules require gift cards to be good for five years at a minimum, says the December 2010 issue of ShopSmart magazine, which is published by Consumer Reports. A major caveat to this new law is that a lot of retailers are enticing shoppers with bonus gift card freebies, but many of these bonuses are not being called gift cards and have tight expiration dates.
For regular gift cards some – but not all – fees are reined in. For example, fees for inactivity can only start if you let your gift card languish in your wallet for a year. If a retailer goes out of business, your gift card is worthless. Make a point to spend your gift cards by the end of January, something the mag story says is hard to do. Some 25% of people surveyed said they had gift cards that were almost a year old. I know I’m guilty!
Bank-issued cash cards with a credit card logo are a different story. They fall under a different set of rules that lets banks charge all sorts of fees. I try to avoid bank-issued cash cards because of these fees, and give cash instead.
Some people feel giving cash is tacky, but I think it can be appropriate if you have a close personal relationship with the recipient. Co-workers and your boss are off limits, big time. But a sibling or friend might appreciate a cash gift a lot more than another red sweater. Do you think giving cash is tacky?