Frequently Asked Questions
Find answers to common questions about gift cards. If your question is not answered here, please feel free to contact us for additional information.
What is a gift card?
A gift card is a prepaid stored-value card issued by a retailer or financial institution that can be used as an alternative to cash for purchases. It contains a specific monetary value that can be spent at participating merchants. Gift cards come in both physical and digital formats.
How do digital gift cards work?
Digital gift cards, also called e-gift cards, are electronic versions of traditional gift cards. They are delivered via email or mobile device and contain a unique code representing a specific value. To use them, you provide the code during checkout, either online or in-store. The purchase amount is deducted from the card balance.
Can gift cards expire?
In many jurisdictions, consumer protection laws limit gift card expiration. In the United States, federal law generally requires that gift cards remain valid for at least five years from the date of purchase or last reload. However, some promotional or reward cards may be exempt from these rules. Always check the terms and conditions of your specific card.
Are there fees associated with gift cards?
Some gift cards may have fees, but consumer protection laws regulate when and how these fees can be charged. Common fees include dormancy fees (charged after a period of inactivity) and reload fees. Many retail gift cards do not have any fees. Any fees must be clearly disclosed at the time of purchase.
How can I check my gift card balance?
Most gift card issuers provide several ways to check your balance. Common methods include visiting the issuer's website and entering your card information, calling a customer service number printed on the card, or checking in-store at a register. Keep your card number and PIN secure when checking balances online.
What should I do if my gift card is lost or stolen?
Contact the card issuer immediately if your gift card is lost or stolen. If you registered your card with the issuer, they may be able to cancel it and issue a replacement. Unregistered cards are typically treated like cash and cannot be replaced. This is why it is important to register cards when possible and keep records of card numbers and PINs in a secure location.
Can I use a gift card to buy another gift card?
Policies vary by retailer. Many merchants do not allow gift cards to be used to purchase other gift cards, as this practice is sometimes associated with fraudulent activities. Check with the specific retailer for their policy on this matter.
What happens to the remaining balance if my purchase is less than the gift card value?
The remaining balance typically stays on the card and can be used for future purchases until the balance is depleted or the card expires. You can continue to use the card for multiple transactions until there is no value remaining.
Can I get cash back from a gift card?
Generally, gift cards cannot be redeemed for cash except in specific circumstances. Some states have laws requiring merchants to provide cash back if the remaining balance is below a certain threshold, such as ten dollars or less. Check your state's laws and the card's terms and conditions for specific policies.
How do I protect myself from gift card schemes?
Protect yourself by never providing gift card information to unknown parties, especially in response to unsolicited requests. Government agencies, utility companies, and legitimate businesses will never ask for payment via gift card. Be suspicious of anyone requesting gift card codes over the phone or email, particularly in urgent or threatening scenarios. Purchase cards only from authorized retailers.
Can I return or exchange a gift card?
Return and exchange policies for gift cards vary by retailer and jurisdiction. Many merchants do not accept returns of gift cards once purchased, as they are treated similarly to cash. Some may allow returns for unused cards within a specific timeframe. Always check the retailer's return policy before purchasing.
Are gift cards safe to use online?
Yes, gift cards can be safe for online purchases when used properly. They can actually provide an added layer of security because they limit your financial exposure to the amount loaded on the card. To use gift cards safely online, only shop at reputable websites, ensure the site uses secure connections (look for HTTPS in the URL), and never share your card information through unsecured channels like email.
What is the difference between a gift card and a prepaid debit card?
Gift cards are typically issued by specific retailers and can only be used at those merchants or their partners. Prepaid debit cards are issued by financial institutions and can generally be used anywhere the payment network (such as major card networks) is accepted. Prepaid debit cards may have more fees and different regulatory protections compared to retail gift cards.
Can I use multiple gift cards for one purchase?
This depends on the retailer's policy. Many merchants allow customers to use multiple gift cards for a single transaction, which is helpful when you have several cards with small balances. Check with the specific retailer or review their website for information about using multiple gift cards.
What should I do if my gift card is not working?
If your gift card is not working, first verify that the card has been activated and has a remaining balance. Check the expiration date to ensure the card is still valid. If everything appears correct but the card still does not work, contact the card issuer's customer service. They can investigate the issue and help resolve problems such as technical errors or unauthorized use.
Do I need to activate my gift card?
Activation requirements vary by card type and issuer. Many gift cards purchased from retailers are activated at the point of sale and ready to use immediately. Some cards, particularly those received as promotional items or through the mail, may require activation before use. Check the packaging or accompanying materials for activation instructions.
Can I reload money onto my gift card?
Some gift cards are reloadable, meaning you can add additional value to them after the initial amount is used. Others are non-reloadable and become inactive once the balance is depleted. Whether a card is reloadable is specified by the issuer and stated in the card's terms and conditions.
Are there tax implications for gift cards?
For personal gift cards given and received as gifts, there are typically no tax implications for the giver or recipient in the United States. However, gift cards given as employee compensation or business incentives may be considered taxable income. Gift cards used to make purchases are subject to applicable sales tax on the items purchased, just like any other payment method. Consult a tax professional for specific situations.
What is the best way to give a digital gift card?
When giving a digital gift card, consider the recipient's preferences and ensure they can access the format you choose. Email delivery is convenient for most people, but verify you have the correct email address. Some services allow scheduling delivery for specific dates, which is useful for birthdays or holidays. Include a personal message to make the gift more meaningful. Always purchase from the official retailer or authorized vendors to ensure legitimacy.
Can businesses refuse gift cards?
Generally, businesses must honor valid gift cards they have issued, as gift cards represent a form of prepaid purchase. However, there may be specific circumstances where use is limited, such as certain items being excluded from gift card purchases (alcohol or tobacco in some jurisdictions) or technical issues preventing processing. If a business refuses a valid gift card without legitimate reason, contact their customer service or corporate office.
How long should I keep gift card receipts?
It is advisable to keep gift card receipts until the card is fully used and you have verified all transactions. The receipt serves as proof of purchase and may be necessary if you need to report a problem, request a replacement for a lost card, or verify the original value. Some people keep receipts even after the card is used as a record of the transaction.
What information should I keep secure regarding my gift cards?
Treat gift card information like cash. Keep the following secure: the card number, PIN or security code, activation receipts, and any access codes for digital cards. Do not share this information with anyone unless you are making a legitimate purchase. Consider photographing or recording card information and storing it securely as backup in case the physical card is lost.
Are there differences in consumer protections between gift cards and credit cards?
Yes, gift cards generally have fewer consumer protections than credit cards. Credit cards offer protections such as dispute rights for unauthorized charges and fraud liability limits. Gift cards are more similar to cash and typically do not offer the same level of protection if fraudulently used. This is why it is crucial to protect gift card information and purchase only from reputable sources.
Can I use an expired gift card?
If a gift card has expired, contact the issuer to inquire about options. Some issuers may reactivate expired cards or transfer the balance to a new card, though they are not always required to do so. Consumer protection laws in some jurisdictions provide protections against expiration, so you may have rights depending on where you live and when the card was purchased.
What happens if a retailer goes out of business?
If a retailer goes out of business, gift cards issued by that retailer may become worthless. In bankruptcy proceedings, gift card holders are generally considered unsecured creditors and may receive little or no recovery. This risk is one reason to use gift cards relatively soon after receiving them rather than holding them for extended periods.
How do inactivity fees work on gift cards?
Federal law in the United States restricts inactivity fees on gift cards. Under the Credit Card Act, inactivity fees can only be charged after 12 months of non-use, must be clearly disclosed at purchase, and only one fee can be charged per month. Many retailers choose not to charge any inactivity fees. Always review the terms and conditions of your specific card to understand what fees, if any, may apply.
What is the difference between a closed-loop and open-loop gift card?
Closed-loop gift cards are issued by specific retailers and can only be used at that retailer or affiliated locations. Open-loop gift cards are issued by financial institutions and can be used anywhere the associated payment network is accepted. Open-loop cards typically have more fees but offer greater flexibility. Closed-loop cards often have fewer fees but limited usage locations.
Can gift card terms and conditions change after purchase?
Generally, material terms like expiration dates and fees cannot be changed after purchase in ways that harm consumers, as this violates consumer protection principles. However, operational terms like customer service hours or balance checking methods may change. If you believe terms have changed in a way that affects your card value, contact the issuer and, if necessary, your state consumer protection office.
How do I verify a gift card is legitimate before purchasing?
Purchase gift cards only from authorized retailers and their official websites. Check the packaging for signs of tampering such as exposed PIN codes, damaged security seals, or reattached stickers. Avoid purchasing gift cards from auction sites, classified ads, or unfamiliar online marketplaces. If purchasing in store, select cards from behind locked displays when available. Verify the card activates properly immediately after purchase.
What documentation should I keep for gift card purchases?
Retain the original purchase receipt, which proves you bought the card and shows the purchased value. Record or photograph the card number and PIN in a secure location separate from the physical card. Keep any activation confirmations or emails for digital cards. This documentation is essential if you need to report problems, request replacement for lost cards, or dispute unauthorized use.
How long does it typically take to resolve gift card disputes?
Resolution timeframes vary significantly by issue type and issuer. Balance inquiry errors may be resolved in days. Lost or stolen registered card replacements typically take 5-10 business days. Fraud investigations usually require 30-60 days. Disputes involving retailer bankruptcy can take months or years with uncertain outcomes. Maintaining good documentation and responding promptly to issuer requests helps expedite resolution.
Are there situations where gift cards can be refunded?
Refund policies for unused gift cards vary by jurisdiction and retailer. Some states require retailers to provide cash refunds for cards below certain thresholds, often ten dollars or less. Federal law does not mandate gift card refunds. Many retailers have no-refund policies for gift cards. Check your state laws and the specific retailer policy. Defective cards or cards with technical issues may be eligible for replacement or refund regardless of policy.
How do promotional bonus gift cards differ from regular gift cards?
Promotional gift cards, offered as incentives with purchases, often have different terms than purchased gift cards. They may have shorter expiration periods, more restrictive usage limitations, and fewer consumer protections under federal law. Promotional cards are typically excluded from the five-year minimum expiration requirement. Always review promotional card terms carefully as they differ significantly from standard gift card regulations.
What should I do if I receive a gift card I cannot use?
If you receive a gift card for a retailer you cannot or do not want to use, you have several options. Some retailers allow gift card exchanges within their retail family. Gift card exchange platforms exist, though they typically offer less than face value and carry risks. You might gift the card to someone who will use it. Some charitable organizations accept gift card donations. Be cautious of schemes targeting people looking to convert gift cards to cash.
Understanding Your Rights: Consumer Protection Framework
Gift Parvaz helps you understand the consumer protection framework governing gift cards. The Credit Card Accountability Responsibility and Disclosure Act of 2009 established federal baseline protections including minimum five-year validity periods for most gift cards, restrictions on fees, and disclosure requirements. Individual states may provide additional protections. Understanding these protections helps you recognize when your rights may have been violated and when you have recourse for problems.
For complex legal situations involving significant amounts or unclear rights, consulting with a consumer protection attorney may be appropriate. Gift Parvaz provides educational information about general protections but cannot provide specific legal advice for individual situations.
Still Have Questions?
If your question was not answered here, we encourage you to contact us. We are happy to provide additional information about gift cards and help direct you to appropriate resources for specific issues.