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Exclusive   2006 Gift Card Study
  STATISTIC: Retailers have eliminated fees and expiration dates to be more  
  customer-friendly. But those terms remain on major credit card gift cards.  

2006 Gift Card Study

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The Office of the Comptroller of the Currency, which oversees national banks, thought consumers needed more information on fees and terms, too. In August 2006 it issued guidelines for national banks that are selling gift cards, emphasizing the need for disclosure of policies and fees both on the card and on a separate brochure to be handed out with the gift card. The gift card itself must have the expiration date; the amount of the monthly maintenance fee, dormancy fee and any other fees; and additional information for customer service, including a toll-free number or Web site address.

The ride-along printed information (which might be as simple as a receipt-style slip of paper) must include several bits of information.

Disclosure for gift cards issued by national banks:

"Simon Mall has good gift-card disclosure," says Horne. "It's much clearer; it articulates just what's going to happen. They've just taken the lead. They've said, 'We want these fees,' and they professionally provide an understandable disclosure statement."

States try to help the consumer
Not surprisingly, Simon Property Group, the nation's largest operator of retail malls, has been at the center of the gift-card-fee-and-expiration-date discussion. A number of states have passed laws that forbid expiration dates and fees on gift cards. The states are: California, Connecticut, Louisiana, Maine, Maryland, Massachusetts, Nevada, New Hampshire, North Dakota, Oklahoma, Rhode Island, Vermont and Washington. However, their jurisdiction over gift cards issued by national banks, which are regulated by federal law, is being challenged.

Simon Property Group, whose cards are prepaid Visa cards issued by MetaBank, won a victory over New Hampshire's attempt to forbid its dormancy fees. New Hampshire law does not allow expiration dates or fees on gift cards. Simon challenged the state law in a 2004 suit, saying federal banking laws supersede state laws. A federal district court judge ruled in August that since the Simon gift cards are issued by national banks, they come under federal banking laws, which at present do not prohibit fees and expiration dates.

Similar suits have been filed in New York, Connecticut and Massachusetts. The New York suit resulted in Simon changing its gift card program so that the expiration date is now 13 months after the card is issued, up from six months. The other suits are still pending.'s survey reflects the effects of these changing laws, too. Target plastic gift cards, for example, have no expiration date in some states and, in others, gift cards expire two years after issue date.

E-gift cards stay 'e'
Of the seven electronic gift cards Bankrate surveyed, only the J.C. Penney card can be used to purchase merchandise in stores. All the others -- Wal-Mart, Costco, Target, Macy's, Bloomingdale's and Kohl's -- can be used only online or for catalog purchases. The Target e-GiftCard can be used at as well. Delivery is via e-mail and all deliver within 24 hours. Only Target's e-GiftCard has an expiration date: 15 years from date of issuance, subject to state laws. None of these retailers charges other fees for their cards or for their use.

As the world of gift cards continues to grow, it will also continue to change, responding to consumer wishes and demands.

Sidebar: See gift card details from all the major retailers and card issuers.

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