Gift Card Blog - ScripSmart

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.

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™.

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.

Two Credit Cards + One Online Order = Great For Gift Cards

When making a purchase online, a common restriction is only being able to use one credit card per purchase. For the most part, consumers don't really need the the ability to use multiple credit cards. That is, unless you'd like to use a bank issued gift card (Visa, MasterCard, American Express).

This limitation can be rather frustrating. For example, if a person gives you a $50 Vanilla Visa Gift Card and your purchase total is $55.64, you simply can't use the gift card because the order total exceeds the balance of the gift card.

Earlier this week, I was ordering my iPhone 4 from apple.com and, lo and behold, apple offered a link to 'Pay with two credit cards'. This is the first time I've seen an online storefront accept two different credit card for one online purchase.

After clicking the link, another field appears for a second credit card. Furthermore, customers can specify the dollar amount charged by each transaction.

 

Consider me impressed, Apple! I would love to see this become a standard feature for all merchants doing business via the internet. Do you know of other businesses accepting multiple credit cards for payment? If so, let's hear about it!

Resturant Closes, Voids Gift Card Purchases

Unfortunately the Gordon James Grill in San Clemente is closing doors. If you have a gift card, use it soon. The last day of operations is set to be Thursday, July 29, 2010.

A sad story for sure and you can bet Penny and Gordon are honorable people: they've taken the extra step of voiding all gift card purchases since June 1, 2010. That's a far cry from the shenanigans Sam Seltzer's pulled in May: abruptly closing doors and selling gift cards up to the last day of operations.

Penny, Gordon, I'm sorry to hear about the closure of your business. Thank you for looking out after your customers and voiding the gift card purchases; I know it's not required. If you open up a new restaurant, please let me know so I can take the trip, have a great meal, and help your new business grow!

UPDATE:

I've exchanged emails with Gordon and Rose and it turns out they even gave people cash bask when buying a gift card with cash. Wow! They've asked I pass along the following:

We have been voiding all gift card sales/purchases since May 31.  We found out on that date that we would officially select a date to close.  All credit card purchases for gift cards have been fully voided.  All cash gift card sales purchasers were told they were the lucky number 13 and we immediately gave them back their cash.  When we knew closing was certain we knew it was not the right thing to accept cash sales with the potential of the guest not being able to redeem.  I am happy with our decision.  Obviously we could not tell people we were closing until we had the chance to inform our staff and family.  This is a big, complicated decision.  Thanks for any information you can get out there for
us.  

Gordon Rose/GJ Grill

Gift Card Advocate - A Must Read Gift Card Blog

Gift Card Advocate has quickly become one of my favorite resources for staying on top of the gift card landscape.

Not only do they offer a comprehensive list of helpful resources for buying and selling gift cards. They've also done research on the percentages you'll pay and revive for gift cards in the secondary market. But most of all, I enjoy the blog. From gift card scams to industry analysis, I appreciate the frequency and variety of posts.

For example, Gift Card Advocate recently offered an insightful analysis of the secondary gift card market. In his article, Peter states there is a shift in the perspective of retailers from hoarding the value of unused gift cards, towards helping customers redeem gift cards in order to increase sales and reduce the dollar amount of gift cards which are turned over to the state as unclaimed property. He also questions if the trend will continue to the extent of retailers buying back their own gift cards, effectively cutting out the a middleman.

Bottom line: if you're following the gift card industry, be sure to bookmark Gift Card Advocate. In fact, I like what Gift Card Advocate is doing so much, I've asked them if they are interested in a partnership.

Kids With Straight A's Deserve A Free $10 iTunes Gift Card

Kids should be rewarded for great marks in school; it's easy to say, but one company is actually making it happen.

Six Delaware Giant Food Locations are offering students who are in grades 5 through 8 a free $10 iTunes gift card if they present their Straight A Report Card. More details are available from WMDT Channel 47.

I think this is a great promotion. Simply put, Giant is associating itself with excellence and establishing goodwill in the community. Brilliant!

An interesting note, according to the the iTunes Gift Card Terms, only persons above the age of 13 are eligible for redemption. I'm willing to bet this group of 5th, 6th and 7th graders, who are under 13, will not have will not have trouble finding a way to redeem their gift card.