OCC ISSUES CONSUMER ADVISORY ON GIFT CARDS
On December 7, 2004, the Office of the Comptroller of the Currency issued an advisory letter educating consumers on the following terms and conditions associated with gift cards:
- Fees. Some cards may not have fees, but others may charge various types and amounts of fees, including purchase fees, monthly fees, inactivity fees, transaction fees and miscellaneous fees.
- Expiration Dates. Cards may have expiration dates, thus it is important to be aware of whether there is an expiration date, what the date is, whether the card may be reissued after expiration and if there is any fee for reissuance.
- Lost or Stolen Cards. Specific rules may regulate lost or stolen cards. For example, there may be rules regulating whether replacement cards are available, whether there is a fee for a replacement and whether money would be credited to a replacement card to account for any transactions made after the original card was lost or stolen.
- Where Cards May be Used. Some gift cards may be used only at the store where it was purchased while others may be used at many locations or even used to get cash at ATMs.
- Trust. Because gift cards are similar to a loan of money to the company that holds the value of the card, shoppers should be aware of who is standing behind the promise to repay the loan and their financial stability.
- Problems and Complaints. If there is a problem with the card, there should be a convenient way to make a complaint and get the problem fixed.
The OCC advised consumers that if information regarding the above topics is not stated on the card or its packaging, the consumer should check to see if there is a toll-free telephone number or website providing this information. In addition, if the information appears on a document separate from the card, the shopper should pass the information on to the recipient of the card in order to protect the value of the card.
The OCC regulates national banks that issue gift cards and has been providing guidance to national banks about stored value cards, such as gift cards, and the information that should be disclosed to consumers. The OCC urges consumers to contact the OCC regarding problems with gift cards issued by national banks that cannot be resolved.
Jeffrey I. Langer and Charles V. Gall