All Gift Cards are Not Equal

Last Updated: May 20th, 2012 - 04:10:43

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All Gift Cards are Not Equal - BEWARE
By Cynthia Kirkeby
May 10, 2012, 09:47 PST

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All gift cards are not equal, as I recently found out. Buyers beware of this particular scam on the part of the Credit Card loyalty programs.

I recently sent for gift cards on my credit card loyalty programs for Christmas. I do this every year, saving up until the holidays. Of course, since I'm not the only one that does this the card companies remind you to order early so that you receive the cards in time for the holidays. I sent for mine at the end of September and put them into my holiday stash drawer when they arrive a few weeks later.

Usually, I send for cards for companies like iTunes, Lowes, Best Buy and the sort which are all favorites of my kids and other extraneous family members, but this time I did something different, I bought two hundred dollar VISA gift cards. I thought, these would be great! I have two kids in college, and this would let them get whatever they need or want during the coming year.

There was nothing different shown when I ordered these cards. There was no warning that there was a short expiration date. Since most gift cards have a one year redemption period, or in California, an unlimited redemption period, a notice that something was out of the ordinary would be appropriate.

In the state of California, gift cards don't expire, with the exception apparently of these unique cards. If you get a gift card through a loyalty program that can be used at multiple merchants, they can make the card expire any time they want to. According to Nancy, the Swift program manager I spoke to on the phone, they can make them expire in as little as one month if they so choose, and they don't tell you that in advance! "Oh but it's on the terms sheet they send with the card," she said. However, I said, "they don't disclose it when you're getting the card, which is illegal." "Oh we don't do anything illegal!" she said, "not us." Well I beg to differ... According to the FTC an offer is illegal and designated as misleading if the terms of the offer are not visible at the time that the purchase takes place. Guess what? None of these out of the ordinary terms were disclosed ahead of time. The expiration was apparently explained in the terms sheet, which no one reads, that came with the card. The required 10pt expiration date was on the card... but in silvery white type on a very busy card on a silvery white section. None of us saw it.

My daughter managed to buy her train ticket to San Luis Obispo before it expired only to get stranded for lack of money on the way home, when she found out she could no longer use the funds. Thankfully her boyfriend's parents gave her some traveling money, in addition to the cash she had on hand for emergencies. My son was planning to hold onto his for an emergency fund, but then gave in an tried to buy an album just after the 1st of January, which is when we found out the card was expired.

What was the response to this from Bank of America and the Swift Program? They reissued the cards after docking them each for a $10 reissue fee! Who knows how long these cards will be good?

Were they legal in what they did? Not according to FTC regulations. Until some lawyer challenges them, I guess they'll continue with what they are doing. I personally will NEVER buy another VISA gift card, and I suggest that you watch out for this particular scam as well.

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