When Money Expires…
Gift cards are a fairly recent invention (although scrip is not), and they have quickly become very ubiquitous. But have you ever had an experience like this:
“I thought I was going to get a meal on the card and then — boom! — it comes time to pay the bill and I don’t have access to that money because the card’s expired,”
[from a Deseret News article]
Probably most of us have had a similar experience, or have avoided this situation by realizing before going to the store that the gift cards we have are expired. I suppose from a business’ perspective, putting an expiration date on the gift cards you issue might make sense for revenue recognition purposes, or to better estimate your periodic liabilities, but is it really fair for that expiration date to be as short as three months in the future? Utah House Representative Larry Wiley doesn’t think so, and so last week he introduced Bill HB324. The bill would prohibit a gift card valued over $25 from expiring before five years.
The committee’s chairman, Rep. Stephen Clark, R-Provo, had a similar line of reasoning.
“If you pay hard dollars for a certificate, that certificate is as good as money, isn’t it?” Clark asked. “Money never expires. Why would that certificate expire? . . . If they have a problem with it, maybe they shouldn’t issue certificates. If it’s a problem accounting-wise, maybe they shouldn’t get into it. To me, when I pay $5 for something, then I ought to be able to have $5 of worth as long as that’s in my possession.”
When the gift cards expire, who has the legal right to the money? In some states, under Escheat Laws that money just gets filed as unclaimed property and ends up in the state’s coffers. (article from bankrate.com on expired gift cards) In the other states, that money is just kept as revenue by the issuing companies.
Tips on gift cards offered by Yahoo Finance and Consumer Reports basically just tell you to check the expiration date. What if I’m busy, or forget to use it before it expires?
My questions are these: In the case of an expired gift card, did the company really provide a product or service to compensate the purchaser to ethically consider it as revenue? Or should those cards remain valid as long as the owner holds on to it?
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As if gift cards weren't backhanded enough. Here's news from CNN: As more retailers file for bankruptcy or go out of business, more than $75...This was taken from an advertisement in a paper, and coincides well with my post about gift cards, When Money Expires. Read it, and...Source: CNN Money ...three ways to save money on gas more ways to save money on gasoline ...both previous posts. ...
April 16th, 2006 at 4:23 pm
I have a Cingular wireless $50 rebate card that had “expired” one or two days before and they will not honor it nor reissue it. That appears to be fraudulent since the $50 was never used and they know it, yet we paid full price for our cellphone. This must be happening to many others out there and should be the subject of a class action lawsuit.
April 18th, 2006 at 4:43 pm
Why do people buy these things??? They are money down the drain incubated by lack of creativity in the depths of procrastination. (ie. people grab them as a quick easy gift). Some of my fellow managers buy hundreds of dollars of these for their employees and lock them up where they will be safe from theft. Years later they remember them only to discover they are worth half their original value.
The companies that issue them are not at fault if they discolse the expiration terms in advance, but here is food for thought–why does the cardholder get penalized? They will lose money by hanging on to the card anyway due to inflation/time value of money.
Do not buy these things with unreasonable terms. Companies charge because people buy–people buy because they are passing them off as gifts to friends and family and don’t care that they fade away over time.
April 20th, 2006 at 5:46 pm
I also have a Cingular Wireless $50 gift card. Get this, I used the gift card before it expired however I had to return the item I purchased because it was defective. Naturally the credit is returned back to the Visa Gift card. After the credit was returned, the expiration date had already passed. Contacted the number on the back of the card and Cingular and they will not refund, honor or reissue the card????? Whats that all about. This should be a class action lawsuit.
May 12th, 2006 at 12:55 am
[...] This was taken from an advertisement in a paper, and coincides well with my post about gift cards, When Money Expires. Read it, and tell me what you think. [...]
August 8th, 2006 at 12:52 pm
I was also issued a Cingular Wireless $50 gift card. It expired two weeks ago and that’s too bad for me. Apparently, gift cards are only for the quick and decisive. I’m sure they have consultants spewing out statistics on how much “rebate” money they won’t have to pay if they use this method of return. You bet they need a class action lawsuit!
August 28th, 2006 at 10:33 am
I’m working on this issue - just made a complaint to the Cal Atty. General about illegally expiring gift cards and will be blogging more about it soon. Have to call back the “office of the president” people at Cingular after my deadline.
March 6th, 2008 at 8:24 pm
[...] if gift cards weren’t backhanded enough. Here’s news from CNN: As more retailers file for bankruptcy or go out of business, more [...]