Effective June 20, 2023, a new law in New York State requires businesses to warn consumers against potential Gift Card Scams. To address the growing prevalence of gift card fraud, this new law requires retailers and businesses to post a notice at or near the gift card display or point-of-purchase to help increase public awareness of this scam and guide vulnerable customers if they believe they are being scammed. Gift card sellers must display these notices in an area visible to consumers and close to where the gift cards are displayed or when the sale occurs.
In addition, New York State strengthened consumer protections for gift card and gift certificate purchases at the end of 2022. Per the NYS Division of Consumer Protection:
- Any gift cards or gift certificates purchased in New York State on or after December 10, 2022, will remain valid for a minimum of nine years from the date of purchase. And, when the remaining value of a gift card or gift certificate is less than five dollars, the recipient can opt to receive cash for the balance.
- All fees are prohibited under the new law, which will prevent gift cards and gift certificates from declining in value. The law specifically forbids the imposition of any “activation fees, retroactive fees, redemption fees, service fees, dormancy fees, latency fees, administrative fees, handling fees, access fees, periodic fees, renewal fees, re-loading fees, or any other fee of any kind.” There is one exception to the law. A gift card or gift certificate that is redeemable at multiple, unaffiliated merchants or service providers may charge a one-time activation fee, not to exceed $9.
Gift cards have become a popular payment method requested by scammers in various schemes and unfortunately, it is unlikely that a victim will be able to recover money lost via a gift card.
To assist businesses with their compliance of this new law, the Erie County Office of Consumer Protection has created sample alerts which can be downloaded and used.
If you have questions or concerns, the Erie County Office of Consumer Protection can be reached by phone at 716-858-1987 or via email at firstname.lastname@example.org.