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Enforcement - Investigate - Education

Gift Cards & Gift Certificates

The Gift Card Act focuses on retailers that issue their own gift card or gift certificate and does not apply to bank-issued cards that have a specific predetermined amount on the card which is usable at a merchant or an ATM.

The expiration date and the dormancy fee, if any, must be disclosed.

No gift card or gift certificate can expire for 24 months after its purchase. A retailer may impose a "dormacy fee," not to exceed $2 per month, after 24 months. A dormancy fee cannot be imposed within 24 months following the date of sale, or within 24 months immediately following the most recent activity in which the gift card or gift certificate was used.

(NOTE: Under new federal rules for gift cards that went into effect on August 22, 2010, money on a gift card can- not expire for at least five years from the date the card was purchased, or from the last day additional money was placed on the card. If the expiration date on the card is earlier than these dates, the money can be transferred to a replacement card at no cost.) 


A gift card’s packaging or sales receipt must include a telephone number to call for information about the expiration date or dormancy fees.

CONSUMERS CAN PROTECT THEMSELVES BY TAKING THESE ACTIONS:

Read the fine print when purchasing gift cards or gift certificates.

Not all gift cards or gift certificates can be used to buy merchandise online, so be sure to ask.

Being a smart and savvy consumer is always the best protection of all, so it pays to know the law. 

See law for further description

N.J.S.A. 56:8-110 Gift Certificate, Card, Validity, Terms Required; Definitions

What ensures that your gift certificate or gift card doesn’t expire and become a worthless? New Jersey has a Gift Card Act that covers not only gift cards but also gift certificates. The law is intended to end commercial practices that use hidden expiration dates to reduce the value of the gift card or gift certificate, and the law also adds consumer protections. 

Gift Card Law

56:8-110. Gift certificate, card, validity, terms, required; definitions.

a. A gift certificate or gift card sold after the effective date of this amendatory act shall retain full unused value until presented in exchange for merchandise, or shall have any and all conditions and limitations, as permitted in paragraphs (1) through (3) of this subsection, disclosed to the purchaser of the gift certificate or gift card at the time of purchase as provided in subsection b. of this section.

(1) In no case shall the underlying funds associated with a gift certificate or gift card expire within the 24 months immediately following the date of sale.

(2) No dormancy fee shall be charged against a gift certificate or a gift card within the 24 months immediately following the date of sale, nor shall one be charged within the 24 months immediately following the most recent activity or transaction in which the certificate or card was used.

(3) A dormancy fee charged against a gift certificate or gift card as permitted by this subsection shall not exceed $2.00 per month.

b. The terms of any expiration date or dormancy fee applicable to a gift certificate or gift card, as permitted by subsection a. of this section, shall be disclosed to a consumer by:

(1) written notice of the expiration date or dormancy fee or both printed in at least 10 point font, on the gift certificate or gift card, or the sales receipt for the certificate or card, or the package for the certificate or card; and

(2) written notice, in at least 10 point font, on the gift certificate or gift card, or the sales receipt for the certificate or card, or the package for the certificate or card, of a telephone number which the consumer may call, for information concerning any expiration date or dormancy fee.

c. Beginning September 1, 2012 if a stored value card deemed a gift card or gift certificate pursuant to section 5 of P.L.2010, c.25 (C.46:30B-42.1) is redeemed and a balance of less than $5 remains on the card after redemption, at the owner's request the merchant or other entity redeeming the card shall refund the balance in cash to the owner.

A merchant or other entity required to comply with the provisions of this subsection shall be liable to a penalty of $500 for each violation plus restitution of the amount of the cash value remaining on the[page67image28800] [page67image28968] stored value card, provided however that the amount of the penalty shall be trebled for an aggregate of 100 such violations occurring during any 12-month period. Failure to provide requested cash redemption for each stored value card shall be considered a separate violation. Upon receiving evidence of any violation of the provisions of this subsection, the Director of the Division of Consumer Affairs, or the director's designee, is empowered to hold hearings upon those violations and upon finding the violation to have been committed, to assess a penalty against the person alleged to have committed the violation in the amounts provided in this subsection. The director shall thereafter return to the owner of the card the amount of the cash value remaining on the card recovered under this subsection, and this shall be the sole remedy available to the owner for those violations.

This subsection does not impose on an issuer or merchant or other entity required to comply with the provisions of this subsection an obligation to advertise the availability of a refund balance redemption. Notwithstanding the foregoing or any provision in section 3 of P.L.1981, c.454 (C.56:12-16), an issuer, seller or redeemer of stored value cards may elect to include a disclosure or may, in the alternative, include a statement on the stored value card or other marketing materials that the card "is not redeemable for cash except as required by law" or similar statement.

This subsection shall not apply to (1) a non-reloadable stored value card with an initial value of $5 or less; or (2) a stored value card that is not purchased but is provided in lieu of a refund for returned merchandise; or (3) a stored value card that can be redeemed at multiple merchants that are not under common ownership or control, including but not limited to network-branded stored value cards; or (4) a rewards card; or (5) a stored value card that is donated or sold below face value to a nonprofit or charitable organization or an educational organization; or (6) a stored value card that is redeemable for admission to events or venues at a particular location or group of affiliated locations, or for goods or services in conjunction with admission to those events or venues, or both, at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue.

d. As used in this section:

"Dormancy fee" means a charge imposed against the unused value of a gift card or gift certificate due to inactivity;

"Gift card" means a tangible device, whereon is embedded or encoded in an electronic or other format a value issued in exchange for payment, which promises to provide to the bearer merchandise of equal value to the remaining balance of the device. "Gift card" does not include a prepaid telecommunications or technology card, prepaid bank card or rewards card;

"Gift certificate" means a written promise given in exchange for payment to provide merchandise in a specified amount or of equal value to the bearer of the certificate. "Gift certificate" does not include a prepaid telecommunications or technology card, prepaid bank card or rewards card;

"Merchandise" means and includes any objects, wares, goods, commodities, services or anything offered, directly or indirectly, to the public for sale;

"Prepaid bank card" means a general use, prepaid card or other electronic payment device that is issued by a bank or other financial institution, or a licensed money transmitter, in a pre-denominated amount usable at multiple, unaffiliated merchants or at automated teller machines, or both, but shall not include a card issued by a retail merchant;

"Prepaid telecommunications or technology card" includes, but is not limited to: a prepaid telephone calling card; prepaid technical support card; or prepaid Internet disk distributed to or purchased by a consumer; and "Rewards card" means a card or certificate distributed by the issuer to a consumer pursuant to an awards, loyalty, rewards or promotional program, without any money or other consideration or thing of value by the consumer in exchange for the card or certificate.