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The Honolulu Advertiser
Posted on: Thursday, January 4, 2007

AKAMAI MONEY
Gift cards here good at least 2 years

GOT A QUESTION?

Akamai Money columnist Greg Wiles can try to answer your money-matters question in The Advertiser. Reach him at gwiles@honoluluadvertiser.com or 525-8088.

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Q. I'm wondering if I recall correctly something I read about Hawai'i's gift card law. Does it state that gift cards and certificates must have an expiration date of two years and if it was donated (such as a round of golf for a fundraiser) it can be limited for one year? — M. Sullivan, Honolulu

A. The law is a little different than what you remember. Here's a recap of it since gift cards and certificates have become so popular as Christmas and holiday gifts.

Hawai'i has one of the better gift certificate and card laws when it comes to protecting consumers. It requires merchants, restaurants or services to honor the certificate or card for at least two years from the time it was issued, said Stephen Levins, executive director of the state Office of Consumer Protection.

The law also prevents sellers from charging service or dormancy fees, Levins said. If you have access to the Hawai'i Revised Statutes online, or have a set of lawbooks handy, look up HRS 481B-13. All this is spelled out.

The law also states that it doesn't apply to gift certificates or cards that are donated to charities for fundraisers, Levins said. In this case the expiration date only need appear on the certificate or be made clear to whoever is receiving the card.

So to answer your question, there is no set minimum date for expiration of gift certificates and cards that are donated. The issuer sets the time frame.

What's not clear is how the law applies when you purchase a gift certificate or card from a merchant located elsewhere. Amazon.com, an Internet-only retailer located in Seattle, sets an 18-month expiration for its certificates.

Nationally gift cards have become a holiday phenomenon, with sales in the United States forecast to reach $24.8 billion, a $6 billion increase, during the recent holiday shopping season, according to a National Retail Federation estimate. About eight out of 10 people polled by the trade group said they planned on buying a gift card while they shopped for holiday gifts.

Ala Moana Center, the state's largest shopping venue, reported one of its strongest sales years for its gift card that's valid at most of the center's 260 stores and restaurants and also at several other shopping malls and centers throughout the state. Matt Derby, center spokesman, said the gift cards don't have expiration dates, but "valid thru" dates. Once that deadline is reached, a person can get a new card with the remaining balance, he said.

The existence of the Hawai'i laws doesn't mean people can relax when buying or receiving the cards.

If you are buying one, make sure you understand the terms of the card. This includes expiration dates and where it can be used. The Federal Trade Commission recommends people make sure none of the protective stickers have been removed or material scratched off to reveal a PIN number, especially on cards that sit in the open next to cash registers.

There have been reports of thieves going into stores and getting card information and the PIN number. After waiting a few days they go online to make purchases using the information.

The FTC also recommends you give the recipient the purchase receipt in case the card or certificate is lost or stolen. For more FTC recommendations on gift cards, do a Web search for "Federal Trade Commission and gift cards" and you'll find a link to a consumer alert on the subject.

If you do receive a gift card, treat it like cash and also make sure you understand the card's terms and conditions. There are store-specific cards such as for retailers like Best Buy Co. issue that can only be used at their stores. Others, like the Ala Moana card, issued with the help of American Express, have the flexibility of being used at many stores but may include a gratuity hold that kicks in when you use it to pay off a restaurant tab.

In this instance, a temporary hold lasting as long as a week and reserving a portion of the card's value can be instituted. This is done in case the card is used to pay a tip, limiting use of the card's value during that period.

Retailers say many people tend to use up their gift cards in the months after receiving them.

That's a sound policy because some folks forget they have the cards or lose them. In cases where the cards go unredeemed for more than five years, the seller can turn over the remaining balance to the state's unclaimed property office.

Do you have a question about personal finance, taxes or other money matters? Reach Akamai Money columnist Greg Wiles at 525-8088 or gwiles@honoluluadvertiser.com