NEW YORK – For this week’s “Tuesday’s Tips”, the New York State Department of State’s Division of Consumer Protection (DCP) reminds New Yorkers of their consumer rights and scam prevention tips related to gift cards and gift certificates, so they avoid losing money this holiday season. 

"New Yorkers should not have to worry about whether that gift card in their wallet is still usable," said NYS Secretary of State Robert J. Rodriguez.  "The Division of Consumer Protection is reminding consumers that the gift cards they purchase for or receive from loved ones this holiday season won’t decline in value and will be theirs to spend for nine years from the purchase date."

Gift cards and gift certificates are a convenient present for the holidays, so it’s important to remind New Yorkers that under New York State law, gift cards or gift certificates purchased on or after December 10, 2022, remain valid for nine years from the date of purchase. And when the remaining value of the gift card or gift certificate is less than five dollars, the recipient can opt to receive cash for the balance. Additionally, the law explicitly prohibits any “activation fees, retroactive fees, redemption fees, service fees, dormancy fees, latency fees, administrative fees, handling fees, access fees, periodic fees, renewal fees, re-loading fees, or any other fee of any kind.” There is one exemption to the law, which is that an issuer of a gift card or gift certificate that may be used at multiple merchants may charge a one-time fee for activation costs, which may not exceed $9.

Alert of Different Types of Scams Involving Gift Cards or Gift Certificates

Below are tips consumers should keep in mind when buying and using gift cards this holiday season: Research vendors before buying.Verify the legitimacy of the seller. Check reviews and articles. Beware of barcodes.  The  FBI released a warning  related to fake barcodes on gift cards. Scammers place fake barcodes over the original barcodes to trick consumers. Consumers are left with an unactivated gift card, while scammers gain access to the funds.

To prevent this scam:Check packaging.When buying a gift card, consumers should make sure the packaging and security seals are intact. Check the barcode. Confirm that the barcode is original to the packaging and doesn’t peel off. Pay close attention to information displayed at checkout.Confirm that the information on the receipt and barcode matches the package.

Use caution with third parties. Consumers should use caution when buying gift cards from third parties or online auctions, as it may be tough to confirm the dollar amount remaining.

Review the terms and conditions.Before purchasing, consumers should always review the terms and conditions to understand what their recourse is if the gift card is lost or stolen.  Companies are required to post terms and conditions either on the card or in attached packaging.

Beware of scammers.  Scammers often seek payment in the form of gift cards, also known as prepaid cards. Government entities, utilities, and other reputable organizations will never call you demanding an overdue bill or debt be paid with a gift card. To learn more, please read our  May 2023  alert on gift card scams.

Consumers having difficulty redeeming gift cards are encouraged to file a complaint with the  New York State Division of Consumer Protection. The Division of Consumer Protection provides voluntary mediation, between the consumer and business, when the consumer has been unsuccessful at reaching a resolution on their own.

Follow the New York Department of State on  Facebook,  Twitter  and  Instagram  and check in every Tuesday for more practical tips that educate and empower New York consumers on a variety of topics. Sign up to receive consumer alerts directly to your email or phone  here.

The New York State Division of Consumer Protection provides resources and education materials to consumers on product safety, as well as voluntary mediation services between consumers and businesses. The Consumer Assistance Helpline 1-800-697-1220 is available Monday to Friday from 8:30am to 4:30pm, excluding State Holidays, and consumer complaints can be filed at any time at  www.dos.ny.gov/consumer-protection.

For more consumer protection tips, follow the Division on social media at Twitter: @NYSConsumer and Facebook:  www.facebook.com/nysconsumer.

– From the New York Department of State