Gift Card Blog - ScripSmart

CARD Act of 2009 - Gift Card Impact (Part 3)

This is the third post in a series discussing the impact of the CARD Act of 2009 on gift cards.

So far, ScripSmart has focused on gift card reviews for the largest merchants in the United States. We figure it's a great way to maximize coverage for consumers. Based on our research, we can confirm most store issued gift cards (iTunes, Amazon.com, McDonald's) do not impose expiration dates or post-sale fees. As a result, they will not be affected by the new federal gift card regulations.

However, we have reviewed a few store issued gift cards which imposed expiration dates. Today we're going to see where things stand for these gift cards before and after the CARD Act of 2009's gift card provisions. We'll also see how the Gift Card Score® of each gift card changed.

Bass Pro Shops Gift Card

Before the CARD Act, the Bass Pro Shops Gift Card:

• Expired after 24 months of inactivity.
• No post-sale fees
• No expiration details were listed on basspro.com
• Gift Card Score: 54

After the CARD Act:

• No expiration date
• No post-sale fees
• Expiration detail are listed on basspro.com
• Gift Card Score: 83

Bass Pro Shops experienced a significant increase in Gift Card Score because they eliminated the expiration dates and are now clearly disclosing expiration and fee details to consumers before making a purchase online.

Petco eGift Card

Before the CARD Act:

• Expires 1 year from purchase date
• No post-sale fees
• Expiration details are listed on petco.com
• Gift Card Score: 44

After the CARD Act:

• Expires 1 year from purchase date
• No post-sale fees
• Expiration details are listed on petco.com
• Gift Card Score: 44

The Petco eGift Card remains unchanged.

Buy.com eGift Card

Before the CARD Act:

• Expires one year from purchase date (unless the eGift Card is added to a buy.com account)
• No post-sale fees
• No expiration details listed on buy.com
• Gift Card Score: 23

After the CARD Act:

• No expiration date
• No post-sale fees
• No expiration details listed on buy.com
• Gift Card Score: 57

Buy.com had one of the more unusual expiration dates. We're happy to see they moved away from the one year expiration, but there is still a lot of room to improve the program.

Above the federal minimum

Two of the three gift cards eliminated the expiration date altogether. It's great to see Bass Pro Shops and Buy.com make a move to simplify their gift card programs for both consumers and employees.

Regarding Petco: both their website and customer service team are informing consumers the Petco eGift Card expires in one year, or the earliest date permitted under the law.

Here is the latest email communication with Petco.

On August 28, 2010, at 2:16 PM, Petco wrote:

"PETCO.com Gift Certificates and unused portions of Gift Certificates expire one year from the date of issue or on the earliest date permitted under applicable law, whichever occurs later. The foregoing expiration date for these online Gift Certificates is not applicable in California and New Hampshire."

As of August 30, 2010, this is the same information is posted on the petco.com website:

 

While a disclaimer states "or on the earliest date permitted under applicable law, whichever occurs later", it's apparent Petco is not up-to-date with gift card laws. I've asked Petco to double check the expiration and mentioned the CARD Act of 2009, but have not received a response, yet.

Gift card buying tip for consumers:

While most store issued gift cards do not carry fees or expiration dates, the quality of gift card programs in the marketplace vary greatly.

Gift Card Score is designed to help consumers easily find the best gift cards; if you are are looking to find the best restaurant gift cards, take a minute to review the gift card categories page for restaurants; we sort gift cards by score and this particular category has Gift Card Scores ranging from 89 to 55.

Remember, a great gift card is more than just no expiration date or fees. Gift Card Score is derived from a patent pending algorithm which analyzes over 30 attributes.

CARD Act of 2009 - Gift Card Impact (Part 2)

This is the second post in a series discussing the impact of the CARD Act of 2009 on gift cards.

When it comes time to redeem a bank issued gift card (Visa, American Express, etc.), they are among the most flexible: redeemable just about anywhere their credit card counterpart is accepted. As a result, they are extremely popular with consumers. However, their flexibility comes at a price: purchase fees, service fees, replacement fees, transaction fees, valid thru dates and expiration dates.

While several states offer great consumer protection for gift cards, they typically have not covered bank issued gift cards. Thankfully, the new federal gift card rules specifically include bank issued gift cards. Today we're going to look at five popular visa gift cards before and after the CARD Act of 2009.

Note: Green indicates a positive change while red indicates negative change.

Vanilla Visa Gift Card

Our first visa gift card, offered by InComm, is a popular option for many consumers. Before the CARD Act, the Vanilla Visa Gift Card was given a Gift Card Score™ of 53 and here is why:

• $2.50 monthly fee after 6 months from purchase date
• $5.95 replacement fee
• $5.95 purchase fee (for a $50 gift card)
• 24 month expiration form purchase

After the Card Act, the Vanilla Visa Gift Card scores a 72. It's a significant increase and easy to see why:

• no monthly fee
• no replacement fee
• $5.95 purchase fee for a $50 gift card
• no expiration (technically, the card has a valid thru date, but will be replaced free of change)

GiftCards.com Visa Gift Card

Another popular seller of visa gift cards. Before the CARD Act, the GiftCards.com Visa Gift Card's had a Gift Card Score of 47:

• no monthly fee
• no replacement fee
• $3.95 purchase fee for a $50 gift card
• $0.44 shipping fee
• 12 month expiration form purchase

After the Card Act, (technically after 06/08/10) the GiftCards.com Visa Gift Card scores slightly lower with a Gift Card Score of 46:

• $4.95 monthly fee after 12 months of inactivity (federal minimum)
  
• $4.95 replacement fee
• $3.95 purchase fee for a $50 gift card
• $0.44 shipping fee
• Minimum 7 year expiration form purchase

Simon Malls Visa Gift Card issued by U.S. Bank

Before the CARD Act, the Simon Malls Visa eGift Card's received a Gift Card Score of 42:

• $2.95 monthly fee beginning 12 months from purchase
• $5.00 lost/stolen replacement fee
• $15.00 expired card replacement fee
• $5.95 purchase fee for a $50 gift card
• Minimum 20 month expiration form purchase

After the CARD Act, the Simon Malls Visa Gift Card scores slightly higher, a Gift Card Score of 44:

• $2.95 monthly fee after 12 months of inactivity
• $15.00 lost /stolen replacment fee
• $5.95 purchase fee for a $50 gift card
• Minimum 5 year expiration form purchase (federal minimum)

GiftcardMall.com Visa Gift Card

Before the CARD Act, the Giftcardmall.com Visa Gift Card was the top scoring bank issued gift card on ScripSmart with a Gift Card Score of 77:

• no monthly fee
• no replacement fee
• $3.95 purchase fee for a $50 gift card
• $1.99 Shipping fee
• no expiration (technically, the card has a valid thru date, but will be replaced free of change)
• 2% foreign transaction fee (for purchases made in a currency other than US Dollars)

After the CARD ACT, the Giftcardmall.com Visa Gift Card scores slightly lower at 75. While the purchase fee increased slightly, the card also is not longer redeemable outside of the United States:

• no monthly fee
• no replacement fee
• $5.95 purchase fee for a $50 gift card
• $1.99 Shipping fee
• no expiration (technically, the card has a valid thru date, but will be replaced free of change)
• no foreign transaction fee (Not redeemable outside of the US)

All Access Visa Gift Card

Before the CARD Act, the All Access Visa Gift Card received a Gift Card Score of just 22. It was among of the lowest scoring gift cards we've ever reviewed because there were several fees and a short expiration:

• $2.95 monthly fee after 6 months of purchase date
• $5.00 lost/stolen replacement fee
• $9.95 check reimbursement fee
• $4.95 purchase fee for a $50 gift card (VERIFY)
• Minimum 20 month expiration form purchase

After the CARD Act:

While researching this CARD Act compliant gift card terms for the All Access Visa Gift Card, I reached out to NetSpend customer support and was informed:

"Unfortunately, we would like to inform you that because of the gift card rules in the CARD account NetSpend has made the decision to discontinue selling gift card products prior to the August 22, 2010 implementation date."

Overall positive, but mixed results:

One gift card was significantly improved and is now among the best Visa gift cards available. Other providers shifted fees and expiration dates and maintained roughly the same Gift Card Score. Finally, one product was taken off the market.

Overall, the changes seem positive and while consumers lost an option, it happened to be one of the least consumer friendly alternatives to gift card giving.

Gift card buying tip for consumers:

Not all gift cards are created equally, even if they carry the same Visa logo. Before making your next purchase, be sure to check the Gift Card Score and make sure you are buying a gift card which offers the most favorable terms for your recipient. ScripSmart is here to help and offers a collection of the best bank issued gift cards to help you be a smart shopper.

CARD Act of 2009 - Gift Card Impact (Part 1)

This the the first in a series discussing the impact of the CARD Act of 2009 on gift cards.

The impact of the New Federal Gift Card Law is beginning to show. Last night while shopping at my local grocery store, I noticed a few things at the gift card mall:

1. Some bank issued gift cards were on the shelf with an expiration/valid thru date less than five years while others had an expiration/valid thru date greater than five years. This is allowed until January 31, 2011, see the ECO-Gift Card Act for more details.

2. Several MasterCard Gift Cards slots were empty. It appeared as though they were intentionally removed, not sold out.

3. A sign was posted mentioning the CARD Act of 2009. This is part of the extended disclosure requirements of H.R. 5502 aka the ECO-Gift Card Act and allows gift cards to be sold which do not have the specific disclosure requirements on the gift cards as set forth in the CARD Act of 2009.

One interesting note: according to the sign, there are certain one-time fees permitted under the CARD Act of 2009, such as "properly disclosed initial purchase fees, lost/stolen replacement card fees and cash-out fees".

For a detailed version of the sign, click on the image below.

Gift card buying tip for consumers:

When buying a bank issued gift card, check the expiration/valid thru date and make sure it is at least 5 years from your purchase date. While gift cards with valid thru dates under five years must be replace at no charge, it's still a hassle and you don't want your gift recipient to go through.

 

New Federal Gift Card Laws, Effective Today

Beginning today, August 22, 2010, the money you place on a gift card sold in the U.S. can no longer expire within 5 years and post-sale fees can not be charged unless the gift card has been inactive for at least 1 year. Furthermore, only one fee per month may be charged.

These new federal gift card laws have been a long time coming (15 months). Consumers in every state will benefit, even those living in a state like California which has some of the best consumer protection for gift cards; that's because state gift card laws typically do not cover bank issued gift cards (think Visa, MasterCard, American Express and Discover logos). While these gift cards can be used just about anywhere, their flexibility comes at a price: purchase fees, maintenance fees, replacement fees and expiration dates.

Thankfully, bank issued gift cards are specifically covered under the new federal gift card laws. It's the one aspect of the Credit CARD Act of 2009's legislation pertaining to gift cards which will have the widest impact for consumers. Taking a look at ScripSmart's bank issued gift card reviews, you'll see many are considered 'Buyer Beware'. These gift cards receive low Gift Card Scores™ due to fees, expiration dates, and 'valid-thru' dates.

Card issuers are going to change policies and we're anxious to fully analyze the impact the new federal gift card laws have on bank issued gift cards. So far we've seen mixed results; however, the overall changes appear to be positive for consumers.

For more information on how your state is impacted, see ScripSmart's quick summary of how state gift card law compares to the new federal gift card law.

Jack in the Box: One Great Gift Card

We just finished our review of the Jack in the Box Gift Card, aka Jack Ca$h. We're impressed with the detailed gift card FAQ, the features and the policies; Jack clearly thought his gift card program through and is dedicated to delivering a great product to consumers.

One feature of the Jack and the Box Gift Card which sets it apart from the rest is the refund policy: Gift card holders can request a check for the remaining balance at anytime without paying a fee and receive the in just 3-5 business days. In fact, this is the first gift card we're reviewed which has such a policy and just the second gift card we've reviewed to receive a Gift Card Score™ of 99. 

That makes the Jack in the Box Gift Card among the best in the market place. We're happy to have found it and happy to congratulate Jack in the Box for taking gift card flexibility to the next level. I'd be interested to know what percent of gift cards are actually returned for a check. My guess is it's a very small percent. In the end, these policies help consumers feel better about buying the gift card, reloading it and using it again and again!

Congrats Jack!

In case your interested, the Disney Gift Card is the other gift card which received a Gift Card Score of 99.

New Jersey's Egregious Gift Card Money Grab

11/16/10 UPDATE: The New Jersey Law Journal reports that a federal judge has issued an injunction blocking the state from taking possession of unused gift card fund.

It's amazing how fast the government can move when they need your money.

Case And Point: New Jersey

The State of New Jersey is in dire financial condition and to help bridge the gap, it's enacted some changes to their unclaimed property law. In short, gift cards which have been inactive for two years are now considered abandoned property. Businesses who issue such gift cards are required to turn the money over to the state.

Assembly Bill No. 3002 was signed into law on June 30, 2010 and was effective the very next day. The new law is also retroactive, impacting any gift card issued which has also been inactive for two or more years.

It's worth noting, this Bill was sponsored by:

DECLAN J. O'SCANLON, JR. - District 12 (Mercer and Monmouth) - Phone: (732) 933-1591

AMY H. HANDLIN - District 13 (Middlesex and Monmouth) - Phone: (732) 787-1170

and co-sponsored by:

Senator Anthony R. Bucco

Our Stance On Gift Cards And Unclaimed Property

ScripSmart's grading system looks down on states which take it upon themselves to include gift cards as unclaimed property. It's no surprise New Jersey Gift Card Law receives an F for consumer gift card protection.

We believe defining gift cards as unclaimed property makes gift cards more complicated for both consumers and businesses. It also gives gift card issuers a reason to impose fees and expiration dates, if permitted by state and federal law.

At the very least, there should be an exception for gift cards which do not charge post sale fees and have no expiration date. It's one of the things we like about Texas Gift Card Law. While Texas does not limit fees for expiration dates in anyway, they recognize a business should be able to issue a consumer friendly gift card without the state punishing them.

Not Just New Jersey Consumers Will Be Affected

Most companies do not know the location of the current gift card holder. The last address they have on file is typically the purchaser. However, the nature of gift cards is such that the purchaser is rarely the holder of the property. As such, the State of New Jersey will consider many gift cards to be unclaimed property when the true gift card holder lives in another state.

For example, your Sister-in-law who lives in New Jersey buys a no expiration gift card and personally mails it to your home in California. The last known address for the gift card will be in New Jersey (where she bought the card). If you forget about the gift card and it's been inactive for two years, the business will follow New Jersey's law and turn the funds over to the State of New Jersey. At that point it's possible the gift card will not be accepted for payment by the card issuer. In effect the gift card has expired, and the card holder must go to the state for reimbursement of the funds.

Ticketmaster's Policy

Last week we reviewed the Ticketmaster Gift Card; it received a great Gift Card Score™. While reviewing the terms, a section caught our attention:

6. Expiration Dates.

The Gift Card has no expiration date. However, in certain states, after a certain period of time, we may remit the cash associated with unused Gift Card balances to certain states pursuant to their abandoned property laws. Once we have remitted that cash to such a state, if someone tries to redeem the Gift Card, it may no longer be redeemed and we may direct them to that state's government instead.

In other words, a state like New Jersey is effectively expiring gift cards. While I believe Ticketmaster should take the high road and accept the gift card as payment and then go to the state for reimbursement; I understand why such a policy would exist. Currently, a Gift Card Score in not adversely effected by a policy such as Ticketmaster's and I don't believe it should be any lower.

Desperation

At the end of the day it's clear the state of New Jersey is desperate for money. The fact that these changes took effect so fast and are retroactive, reeks of desperation.

However, the Bill states other motivations:

"The primary purposes of this measure are to protect New Jersey consumers from certain commercial dormancy fee practices and modernize the State’s unclaimed property laws."

Let's be honest, modernizing unclaimed property law for gift cards has two components:

1) Define the notion of a gift card in unclaimed property law.

2) Specifically stating gift cards are not considered unclaimed property.

Here is a quick summary of each state's stance on whether or not gift cards are seen as unclaimed property.

But The New Federal Gift Card Law?

Later this month, new federal gift card law goes into effect. One aspect of this law is a minimum expiration date of 5 years. New Jersey has put business owners in a tough place: they are going to have to turn gift cards over to the state before the minimum expiration date allowable under federal law. It's just unfair and not in the interest of consumer protection.

A Great Gift Card Promotion From The Southeast Missourian

Last week I came across a clever gift card promotion by the Southeast Missourian, a daily newspaper based in Cape Girardeau, Missouri. They've set up a gift card shop and are offering local merchant gift cards at 50% off; judging by the number of items which are sold out, the program looks to be a success. This is a great alternative to the traditional coupons merchants issue and just one reason gift cards are so popular.

While poking around the offerings, I took a look at the restrictions link and there was no mention of expiration dates or fees, however, other restrictions were covered. I jumped back over to ScripSmart's summary of Missouri Gift Card Law and it's legal to impose fees and expiration dates. I dug some more on a few of the merchant's websites and didn't see any more detail on the gift cards.

 I decided to put a note into Southeast Missourian and received a quick and polite response confirming the gift cards do not expire. I'm impressed! Both the promotion's creativity and the teams quick response are great to see.

We Want Gift Card Score™ To Be Everywhere

I couldn't help but think about how nice it would be if a Gift Card Score™ were listed next to each gift card in the shop. Rest assured, we'll be working hard to bring our gift card reviewing system to the public in more ways, so stay tuned. In the meantime, let us know if you have any ideas where you'd like to see ScripSmart's Gift Card Score™.

Buried: Worthless Movie Gallery, Hollywood Video And Game Crazy Gift Cards

In early May, I wrote about Movie Gallery going out of business and advised any gift card holders to redeem ASAP.

After a few months of liquidation, the Movie Gallery website is no longer selling product and the same goes for hollywoodvideo.com and gamecrazy.com. I also called several Hollywood Video locations around the country and all the numbers were disconnected.

While it's great Movie Gallery was able to accept gift cards during bankruptcy, consumers were never given a last day of operations for buying merchandise and redeeming gift cards. Based on our best judgment, it appears the gift cards are no longer accepted for merchandise.

Off To The Gift Card Graveyard

We've done the digging and buried all three in the gift card graveyard along side other gift cards which were once valuable, but now worthless.

ScripSmart Can Help

If you owned one of these gift cards and didn't get a chance to use it, tough luck. If you want to avoid getting stuck with a worthless gift card, sign up for a ScripSmart Account and register your gift cards. When we catch wind of a company going under and you have that gift card in your account, we'll send you an alert. Just be sure to enable the bankruptcy alert option when signing up.

UPDATE: I've received confirmation from Hollywood Video/Movie Gallery Customer Relations.

On Aug 25, 2010, at 2:50 PM, e-mail-us wrote:

"Due to Movie Gallery Inc.'s recent bankruptcy filing, all remaining unused gift cards are considered null and void and we are no longer able to exchange online. We apologize for any inconvenience this may have caused."

 

 

Colorado Gift Card Law Set To Change August 11, 2010

If you live in Colorado and give or receive gift cards, there are some positive changes around the corner. According to Colorado Senate Bill 10-115, gift cards issued on or after August 11, 2010 will be governed by new state law. Here is a quick summary of what you can expect to change:

1. No more post-sale fees or purchase fees.

2. Merchant's are required to give cash back for gift cards with a balance of $5.00 or less, upon request.

It's important to note: gift cards can still expire at any time and several types of gift cards are excluded, most notably bank issued gift cards (Visa, MasterCard, American Express), phone cards and promotional/loyalty gift cards given away for free.

Here is a pdf of Senate Bill 10-115 and ScripSmart's Summary of current Colorado Gift Card Law.

New Federal Gift Card Law starts August 22, 2010

Colorado's changes to gift card law are sure to be overshadowed by the new federal gift card laws going into effect August 22, 2010. For Colorado consumers this means gift card funds may not expire within 5 years (bank issued gift cards are specifically included). Also, bank issued gift cards may not charge a fee unless the card has been inactive for at least one year and then it may only be one fee per month.

Colorado Is Giving Businesses An Incentive To Impose Expiration Dates

Colorado is a states which does two things and, in turn, gives gift card issuers a good reason to impose an expiration date:

1. Colorado sets no limits on expiration dates.

2. Unused balance of gift cards must be turned over to the State of Colorado after 5 years of inactivity.

Let's consider two scenarios:

Company A's gift card expires in 5 years from purchase (the federal minimum).

Company B's gift card has no expiration date.

Assuming the same $100 gift card purchased 6 years ago and is inactive for 5 years:

Company A will recognize the gift card balance as earned revenue because the card has expired  5 years from purchase and it's never considered unclaimed property by the State of Colorado.

Company B will have to turn the balance over to the state (less $25.00) as mandated by unclaimed property law. When the customer comes in to redeem their gift card 7 years after purchase, Company B will honor the gift card in accordance with store policy and then must go to the state for reimbursement of the funds they've already turned over as unclaimed property.

Case And Point

If a business has to turn the money over to the state, they have less reason to offer a consumer friendly gift card program with no expiration date. As a result, Colorado's Grade on ScripSmart remains F even thought they've improved the protection for consumers.

5 Great Reasons To Use Your Gift Card Today

It's wise to redeem gift cards sooner than later and for some, that's easier said than done. I'm one of those who has trouble remembering to use my gift cards. In fact, ScripSmart's Nag-me Alerts were developed to give me an extra kick in the pants and help me redeem those gift cards which have been collecting dust.

In case you need convincing, here are five great reasons to use your gift card today:

1. Gift Cards Become Lost And Forgotten

It's easier than you think and not just for the unorganized. Billions of gift card dollars go unredeemed each year. Gift cards can be difficult to replace, often requiring you have the lost gift card number which you never recorded elsewhere. Furthermore, it's possible the gift card is non-replaceable, even with a gift card number or proof of purchase. For example, the PetSmart Gift Card rules specifically state: "We cannot replace lost or stolen Gift Cards".

2. Gift Card Fees And Expiration

While many gift cards do not have fees or expiration dates, there are still plenty of gift card in the marketplace charging fees and imposing expiration dates. Keep in mind, New federal gift card law allows for fees and expiration dates.

3. Companies Go Out Of Business, Gift Cards Become Worthless

It happens again and again. If a company goes under, you're gift card is set to implode, soon to become worthless. It can happen without warning and we've seen both small and large operations close up shop giving gift card holders little or no time.

4. Companies Close Locations

Today may not be a convenient time to redeem your Blockbuster Gift Card, but when the location nearest you closes, it's going to be a lot less convenient.

5. Stolen Gift Cards

Gift cards are easy for criminals to use: no id required, no name on the card and no risk for the business when they accept a stolen gift card for payment. Whether you leave your purse at a restaurant or get mugged in a back alley, gift cards are second only to cash for ease of use and difficulty of replacing.

ScripSmart Accounts Can Help

If you're like me and have trouble remembering to use that gift card in your wallet, sign up for a free ScripSmart Account and take advantage of our alert system. Nag-me alerts are just one of four types of ScripSmart Alerts available.