Law protects consumers from gift certificate fraud     Send a link to a friend

Gift certificates must clearly indicate any expiration dates or fees

[AUG. 31, 2004]  SPRINGFIELD -- Gov. Rod Blagojevich signed legislation Aug. 17 requiring all gift certificates to clearly indicate any expiration dates, service charges or other fees. By signing the bill, the governor reaffirmed his commitment to increasing consumer protection and limiting deceptive business practices.

"Consumers deserve to know exactly what they're buying and how long the offer is good. If a gift certificate carries additional fees or will expire at some point, that should be openly disclosed to the purchaser," the governor said.

"Gift cards have a cash equivalent, but when stores start charging unnecessary or hidden fees, it's as if gift cards are the gift that keep on taking," said Attorney General Lisa Madigan, who helped draft and secure passage of the legislation. "This legislation is critical when it comes to protecting consumers and ensuring they have the information they need to make decisions that won't cost them later."

Under Senate Bill 2901, pushed by Attorney General Lisa Madigan and sponsored by Sen. Susan Garrett, D-Lake Bluff, and Rep. Kathy Ryg, D-Vernon Hills, gift certificates with expiration dates will be required to have either a printed expiration date on the gift certificate itself, presented in clear language and in a conspicuous location, or a toll-free number that will provide expiration date information.

"Retailers need to be upfront about what they're going to charge," said Sen. Garrett. "Many consumers are not aware of costs and penalties associated with these cards. Hidden fees, expiration dates and dormancy charges are often attached to gift cards without the buyer's knowledge."

 

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If a gift card has any service charges, dormancy fees, account maintenance fees, cash-out fees, replacement card fees, activation or reactivation charges, the issuer must post written notice of the policy wherever the cards are sold. These written notices must be issued by the state treasurer.

Gov. Blagojevich hailed the new legislation as an exemplary compromise. "This legislation will protect consumers from excessive fees and hidden expiration dates, but it also allows vendors to choose the method of communication that suits them best."

"I'm pleased that the governor is joining me in supporting this legislation, which offers important consumer protections for purchasers of gift cards," said Rep. Ryg. "Gift cards are a wonderful convenience for shoppers and gift givers, merchants and service providers. This legislation was a cooperative effort between the attorney general, treasurer, Illinois Public Interest Research Group and the Illinois Retail Merchants Association. It's exciting that our work together resulted in a good law for the shoppers and businesses of our state."

The legislation is effective immediately.

[News release from the governor's office]

 

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