Groups issue ‘Gift Card Holder’s Bill of Rights’ for holiday season – National Consumers League

November 18, 2008

Contact: 202-835-3323,

Washington, DC—The National Consumers League (NCL), the nation’s oldest consumer advocacy organization, today called on issuers of gift cards—banks, credit card companies, and retailers—to go easy on consumers this holiday season by lightening up on fees and expiration dates on gift cards. NCL is asking gift card issuers to adhere to a “Gift Card Holder’s Bill of Rights,” setting out what advocates believe would be fairer terms and fees than those currently associated with the cards.

NCL, joined by Consumer Action and the Montgomery County (Maryland) Office of Consumer Protection, is urging companies that issue gift cards—an industry that has mushroomed into a $97 billion annual business—to adopt more pro-consumer business practices.

“With the worst economic times in a generation looming and many Americans facing job loss, decreased wages, and increases in the cost of health care, groceries, and other goods, this holiday gift-buying season may be a source of dread, not joy, for consumers watching their budgets,” said Sally Greenberg, NCL Executive Director. “The companies who profit from the rise in popularity of gift cards owe it to consumers to reduce their fees and expiration dates, improve the value of their cards, and compete for consumers’ business.”

“Gift cards make great gifts, because they allow the recipient to get something they really need or want, but all too often they are rife with ‘gotcha’ fees and other anti-consumer traps,” said Linda Sherry, Consumer Action’s Director of National Priorities. “We urge gift card issuers to do the right thing and make sure their products have fair terms with no deceptive loopholes that erode their value.”

“While stores in Maryland are prohibited from selling gift cards with expiration dates and fees during the first four years, that is not the law in all states,” said Montgomery County Office of Consumer Protection Director Eric Friedman. “In addition, banks continue to market cards with terms and conditions that are not favorable to consumers. We urge the marketplace to adopt this Bill of Rights for all gift card holders.”

Gift cards, which come in two categories— traditional retail gift cards, or “closed-loop” cards, and those issued by banks and credit card companies, or “open-loop” cards—have become increasingly popular gifts in recent years. During 2007’s holiday shopping season, nearly 70 percent (68.9%) of consumers reported receiving a gift card. Gift cards sales in 2007 totaled $97 billion and are projected to top $100 billion in 2008.

In 2006, the value of unused gift cards reached $8 billion. Depending on unclaimed property laws that vary by state, unused gift card funds eventually revert to either the state or issuing company. The Gift Card Holder’s Bill of Rights recommends, however, that gift card funds that go unused due to loss, theft, or failure to redeem should go into state coffers and be used to benefit consumers, rather than back into the pockets of the card issuers.

The flexibility of gift cards has clear appeal to consumers, but terms and conditions may be turning many potential buyers away. According to the National Retail Federation, nearly one in ten consumers (9.8%) say they are discouraged from buying gift cards because they are worried about fees and expiration dates.

“Through a dizzying array of extra costs that include maintenance fees, inactivity fees, dormancy fees, and card-replacement fees, as well as unreasonable expiration dates, and high point-of-sale fees, card issuers are pocketing more of the consumers’ money than we think is appropriate or fair,” said Greenberg. “To address this problem, we ask the companies that issue gift cards to consider the guidelines set forth in our Gift Card Holder’s Bill of Rights. We think customers will greatly appreciate having a few more dollars in their pocket, especially during this very rough economic time. ”

Gift Card Holder’s Bill of Rights

For more detailed explanations of each “Amendment,” or for consumer information about choosing and using gift cards wisely, visit

  1. Gift cards should not have expiration dates.
  1. The value of gift cards should not be reduced by arbitrary fees that diminish a card’s value.
  1. Fees assessed on a card purchase should not exceed five dollars or ten percent of the value of the card, whichever is less.
  1. Card replacement fees should not exceed two dollars or ten percent of the purchase price of the card, whichever is less.
  1. Cards with a balance of five dollars or less should be redeemable for cash with no fee.
  1. Balance inquiries should not deduct from the value of the card.
  1. Terms and conditions should be clearly disclosed.
  1. Unused funds should not go into the card issuers’ pockets, but should accrue to a state fund to be used for the specific benefit of consumers.
  1. Funds from the sale of gift cards should be segregated and held in trust accounts so as to be automatically honored in the event of the cards issuer’s bankruptcy.
  1. These rights should cover any electronic gift card with a banked dollar value.


About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit

About Consumer Action

Consumer Action (, founded in 1971, is a national non-profit consumer education and advocacy organization headquartered in San Francisco, with offices in Los Angeles and Washington, DC.

About the Montgomery County (Maryland) Office of Consumer Protection

The Montgomery County (Maryland) Office of Consumer Protection (OCP) investigates thousands of complaints each year involving automotive sales and repairs, new home purchases, home improvements, credit and financial issues, retail sales, internet services and most other consumer transactions. Consumers can check our latest Gift Card Reports at: