January 03, 2006
High fees for multiple-use gift card
Beware! The ‘multiple-use’ gift card that you received this Christmas may not be as great a gift as you thought it would be – especially if you are living in Connecticut. You may end up paying a huge sum as fees on these types of gift cards, which are issued through American Express, Discover, MasterCard or Visa. This despite the fact that a Connecticut law prohibits inactivity fees and expiration dates on gift cards. The catch here is that the law still does not apply on multiple-use gift cards.
But the stringent rules have ensured that at least some of the card issuers stay out of the state. While Discover Card does not offer gift cards in Connecticut, American Express does not sell its cards directly to Connecticut residents.
What has irked state representatives are the numerous types of fees that the issuing companies charge for a small gift card. When you get a multiple-use gift card, you not only have an expiration date, you have to pay a purchase fee, inactivity fee and even a processing fee if you want any money that remains on the card after you’ve used it to be returned to you.
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