Learn the hidden rules behind your gift card -- and you could end up with more cash in your pocket.
Recession Mama Michele Ashamalla: Chances are, most of us have recently given or received a gift card of some type, and also probably have a fair number of them around the house. To protect consumers, some recent federal legislation was enacted. The Credit Card Act of 2009 prohibits gift cards (store- or bank-issued) from expiring before five years from the date of purchase, or when money was last loaded onto a card, and prohibits fees for the first 12 months. It will go into effect next summer. Some state laws are much stronger, however, and in the case of stronger state laws, the state laws are what businesses must follow. Check out other state laws governing gift cards.
You might be surprised at some of your state's protections. In California, not only can gift cards never expire, but any gift card in an amount under $10 can be redeemed for cash! Let me tell you that retailers are often unaware of state laws. When I found out about the under $10 law, I traded three gift cards that had been cluttering up my wallet for cash. Two of the three stores had never heard of the year-old law, but I handed them a copy I printed off the Internet. Retailers need to be aware of current laws, though, because states are really cracking down. In August, 2009, Starbucks paid $225,000 in settlement of a lawsuit for failing to comply with California law. Check out your state laws and make the most of those gift cards!
A former state deputy attorney general and current stay-at-home mom, Recession Mama Michele Ashamalla has three kids and ten years of experience stretching one salary to cover the necessities and more. She's all about saving money whenever you can, so you have it to spend on whatever you want!