OCC Details Problems, Issues with Gift Cards
Office of the Comptroller of the Currency Says Read the Fine Print
Last year consumers lost $8 billion by failing to utilize the gift cards that they received or purchased. Gift cards may have expiration dates, fees, and other terms that can reduce their value. In addition, there may be limits on where cards can be used, and a card owner may need to read the fine print that explains handling complaints and lost or stolen cards.
According to the National Retail Federation, the projected value of the multiple gift cards that almost 90% of American shoppers will buy this holiday season will exceed $26 billion.
The OCC has also issued guidance to national banks that issue gift cards such as "stored value cards". The guidance requires banks to clearly disclose the fees and terms associated with the gift card. In addition, banks should avoid any marketing that misleads
people about the terms, conditions, or limitations of their gift cards.
Gift cards have rocketed to the top of American gift buyers' preferences over the last several years. They are easy to wrap or place into a card or stocking, and they allow the recipient a measure of flexibility in choosing her own gift(s) while at once not coming across as being as crass or superficial as just giving money.
Merchants have continually made gift cards more attractive and classy by coupling them with nice artwork or themes such as those related to a movie.
Americans have been more apt to complain about some gift cards having a "statute of limitations" or a relatively short eligibility window in recent years as merchants have sought to use gift cards as a means of enticing people to come to their stores within a certain time frame. Critics say that all gift cards should be made fee-less and unlimited in time of eligibility, as the merchants issuing them have already received their money up-front.
Some politicians in Milwaukee, Wisconsin last year drew the ire of critics for suggesting that all expired or unused gift card money should be sent to the city or state government. Citing studies such as those by Consumer Reports that deduced nearly 20% of all gift card money never gets used because the cards expire, or get lost or stolen, the politicians opined that they had found a new source of money that, instead of being "wasted", could instead be used to finance public projects.
However, two bills that were introduced to achieve this end were struck down. Most of the public were outraged at the suggestion.
Original Newswire Source:
http://prnewswire.com/cgi-bin/stories.pl?ACCT=104&STORY=/www/story/11-21-2007/0004709979&EDATE=
Published by Brant McLaughlin
I am a Writer driven by endless curiosity and a deep desire to waste time creatively. View profile
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2 Comments
Post a CommentI've known about this dirty little trick for years, because back in 2003, I got a SIMON card for $50 as a Christmas gift, and didn't use it until the following July, and it was worth a little over $35! I read the fine print on everything, but it never occured to me to do so for a flippin' gift card. I guess corporate deceit is akay, as long as you bury the truth in the fine print, and blame the consumer for not whipping out the ol' magnifying glass!
I heard about this, that is wild, I never in my mind would have thought that 8 billion dollars could be made by manufacturing little cards. I might have to make some of my own, lol. Great article!