How To Not Get Scammed Buying Gift Cards This Holiday Season

NEW YORK — As with any gift, it's the thought that counts. And some thought needs to go into buying gift cards and gift certificates for your family and friends during the holiday season.

To help consumers make good choices, the New York State Division of Consumer Protection issued some tips to inform and empower New York consumers when purchasing gift cards.

Because gift cards have become increasingly popular, it's important for consumers to understand the pitfalls surrounding gift cards in order to avoid scams.

Robert J. Rodriguez, the acting secretary of state, said if gift cards are on your holiday shopping list, the consumer protection division wants you to know your rights when it comes to buying and using them.

"The convenience of gift cards makes them a very popular present to give and receive during the holiday season," he said.

In New York, people who buy and use gifts cards have certain protections. The current law says that no gift card may expire earlier than five years from the date of purchase and requires businesses to prominently post the terms and conditions that apply to their gift cards, including how to replace a missing card.

Here are some tips consumers should keep in mind when buying and using gift cards this holiday season from the Division of Consumer Protection:

• Research retailers before purchase. Verify the legitimacy of the seller. Check reviews and articles.
• Check the packaging. When buying a gift card, consumers should make sure the packaging and security seals are intact.
• Use caution with third parties. Consumers should be careful when buying gift cards from third parties or online auctions, because it may be difficult to verify the dollar amount remaining.
• Review the terms and conditions. Always review the terms and conditions and check for hidden fees or restrictions on the use of the gift card. "Dormancy Fees" for non-use cannot be imposed if the card is used within two years of the purchase date, and any such fees must be waived where the cardholder uses it within three years of the purchase date.
• Check unclaimed funds site for unused gift cards. Businesses should transfer any uncollected gift cards funds to the state comptroller in the name of the purchaser. The New York State Office of the State Comptroller has an application process where consumers can search to see what funds may be available for them. Consumers can access this site here.
• Beware of scammers. Scammers may try to get consumers’ gift cards. Consumers should be particularly cautious about callers claiming to be from the government or utility company saying that an overdue bill or federal debt can be paid with a gift card.
• Follow up with unused gift cards in the case of bankruptcy. Claims can be filed against companies that filed bankruptcy for the card amount here. If a business has closed, funds may also be available with the state comptroller.

If consumers have problems with an existing card, they are encouraged to file a complaint with the state Division of Consumer Protection. It provides voluntary mediation, between the consumer and the business, if the consumer has been unsuccessful reaching a resolution on their own.

The Consumer Assistance Helpline is available from 8:30 a.m. to 4:30 p.m. Monday through Friday, excluding state holidays. Call 1-800-697-1220.

Consumer complaints can be filed at any time by clicking here. The division is also reachable on Twitter or Facebook.