As shoppers head to the stores to take advantage of post-holiday sales or return unwanted presents, gift cards continue to make news.
The New York Post reports retailers have found a way to avoid turning over unused funds to those states that make an effort to claim the money from long neglected gift cards. (The Post estimates unused gift card balances amounted to $3.5 billion this holiday season.) Via separate gift card units — known in the industry as “giftcos” — established in states with more retailer-friendly abandoned property laws, certain chains are able to keep the money left on dormant store-issued gift cards.
The Post writes: “About half the states allow stores to pocket this easy money. In turn, retailers have become shoppers and have scouted out these friendly states as a base for their gift card units,” adding, “These moves mimic those of credit card operations, which are usually based in states that allow them to charges the highest interest rates.”
However, these out-of-state divisions don’t mean retailers can neglect home-state rules governing gift card fees and expiration. To ensure you don’t lose the money on any gift cards recieved over the holidays, be aware of the balance on your gift card and when it expires. For more on making sure you don’t lose gift card balances to retailers or the state, see “Free money: how to claim expired gift card funds.”
Speaking of state laws and gift cards, the calendar change to 2008 brought with it new rules addressing unclaimed property. In California, retailers have to give shoppers gift card balances in cash when there is less than $10 remaining on a gift card. That should mean extra pocket money for shoppers who previously may have had too little money to afford anything at a given store, instead opting to simply throw the card away. This new law even covers gift cards purchased before the rule went into effect.
Meanwhile, the Network Branded Prepaid Card Association reminds consumers that certain gas stations now allow consumers to pay at the pump with gift cards. At such locations, drivers can put an amount up to the value of their gift cards into their tanks. But a gift card can’t always be redeemed for unleaded with a card swipe. Consumers visiting some gas stations will find that paying at the pump “can trigger a preauthorization transaction that results in your card being declined, even though you have enough funds to pay for the gas you intend to pump.”
That would appear to be due to the same strategy employed by merchants who choose to temporarily “block” more of cardholders’ credit limits than necessary when they pay at a pump with traditional credit cards.
Although I’m not sure how drivers will know whether their gift card is accepted pump-side (since I’ve personally never noticed any sign that a given gas station takes gift cards in the first place), if not accepted, the NBPCA says consumers should just let their cashier know they will be using a gift card and pay inside. Still, with the price of gas being what it is, your balance will have to be pretty large in order to fill up your tank with a gift card alone.