As the economic crisis forces retailers to close store locations, and with the holiday season approaching, Attorney General Steve Six would like to remind consumers that certain laws apply to the purchase and redemption of gift cards and gift certificates in Kansas.
"In times of economic uncertainty, it is important for consumers to be aware of their rights and limitations this holiday shopping season," Six said. "Be aware of the financial condition of the store where you purchase gift cards. Unfortunately, the gift cards may become worthless if the store fails."
A couple things to remember about gift cards:
As of January 1, 2007, a merchant shall not charge a fee against the balance of a gift card until at least 12 months have passed from the date of purchase, and a gift card or gift certificate may not expire until at least 5 years have passed from the date of purchase.
A gift certificate or gift card sold without an expiration date is valid until redeemed or replaced. In addition, all conditions and limitations must be disclosed to the purchaser of a gift card or certificate at the time of purchase. K.S.A. 50-6,108.
These laws apply to all gift certificates or gift cards distributed by the issuer to a consumer for face value. Gift cards do not include cards issued by banks or other financial institutions with a preset amount, which may be used at multiple, unaffiliated merchants or at automated teller machines.
A gift card issued by a retailer that files for bankruptcy or closes its doors may become worthless. If a retailer files for bankruptcy, consumers should call to find out if the store is still accepting gift cards.
If so, those gift cards should be used immediately, such as those from Circuit City and Linens ?N Things. In some cases, the retailer may not allow consumers to redeem the full value of the gift card. In other cases, the competition may accept your gift card or gift certificate.
If the retailer refuses to honor outstanding gift cards or certificates, consumers may consider filing a "Proof of Claim" against the company with the appropriate U.S. Bankruptcy Court. Gift card holders will be treated as unsecured creditors, however, and are unlikely to receive full value for their gift cards.
The necessary form for filing a claim can be found at http://www.uscourts.gov/bankform.
Most importantly, the Attorney General reminds consumers to monitor the financial condition of any retailer for which they hold a gift card or are considering a purchase from during this holiday season. If consumers have additional questions about gift cards of holiday shopping, call the Consumer Protection Division at 1(800) 432-2310.
