Confusing and Contradictory Laws
E-commerce sites and other online business ventures often have to deal with complicated state and federal rules regarding the issuance of gift certificates and gift cards. Unfortunately, the new laws may simplify some of this while in some cases, it may complicate it even further. Those who do not do inter-state commerce will have an easier time dealing with the new laws than those who trade across state lines.
Examples of some of the issues that might be faced by those who issue gift certificates include:
Fees on gift certificates - Pennsylvania, Wyoming, Wisconsin and South Dakota place no restrictions on fees. The new federal law states that gift certificate holders may be charged an inactivity fee if the card is not used within one year which means the federal laws would supersede the state laws.
Gift certificate expiration - Pennsylvania, New York and Nevada allow vendors to define the certificate expiration dates. California does not allow any expiration dates on gift cards or certificates. The new federal law states that cards must be good for at least five years and consumers who request the balance be transferred to a new card must be allowed to do so without incurring any additional fees.
Escheatment laws - Most states have escheatment laws that state if the owner of a financial instrument cannot be located within a certain amount of time, the funds are turned over to the state and placed in their unclaimed property division account for the benefit of the owner, heirs or estate. Most states do not consider gift cards or gift certificates as something that is owned, nor do they consider them an asset. One exception to this rule is New Hampshire law which states any gift certificate or gift card with a value of over $100 must be turned over to the unclaimed property division if the card remains inactive under their laws. They are the only state with these rules.