Store, service, and mall gift cards have become an increasingly popular product, especially for gift-giving. Though they are convenient, they come with their own set of questions and requirements. The Gift Cards Act is in place to protect you.
The Act ensures that you get what you paid for—that (aside from exceptions) the value of a gift card is not reduced or eliminated due to service fees or expiry dates. The Act applies only to gift cards bought on or after June 18, 2008, and includes gift certificates. This does include prepaid phone cards.
Gift card expiry
Generally, expiry dates on gift cards are prohibited. If you have a gift card with an expiry date that’s in violation of the Act, the card remains in effect as if there were no expiry date.
Gift cards can have an expiry date only if:
- the card is issued or sold for a specific good or service (for example, a manicure or a facial). Retailers are not expected to make the same product or service available at the same price indefinitely.
- the card is issued for charitable purposes. Retailers and other businesses offer these types of gift cards to charitable organizations to help them raise money, and it is reasonable that they are time-limited.
- the card is issued for promotional purposes. A card that is given away as a prize or sold to consumers at a discount is allowed to have an expiry date.
Gift card fees
Fees on gift cards are not permitted under the Act except for the customization of a gift card (for example, putting a consumer's photo on the card), to replace a lost or stolen card, and dormancy.
Dormancy fees may be charged after a set period on multi-store cards—cards valid for use at multiple, unaffiliated stores, such as those sold by a shopping mall.
The regulation allows for a monthly fee of up to $2.50 if the card has been inactive for 15 months. You may, in the 15th month, request a three-month extension, giving you up to 18 months to use the card without penalty.
If a fee is charged in contravention of the Act, you have the right to demand a refund by giving written notice to the issuer within one year of the date the fee was paid. The issuer is required to provide the refund within 15 days of receiving the notice.
All issuers of gift cards are required to disclose all restrictions, limitations, and conditions with respect to the use, redemption, or replacement of the gift card, including any permitted fee or expiry date. This information must be provided in writing, in a manner that is likely to bring it to the attention of the cardholder.
In addition to the disclosure requirements listed above, the issuer of a multi-store card must also include a prominent notice on the front of the card indicating that the back of the card contains information about the fees, and information on the back of the card clearly describing the amount payable for such fees and the number of months that must elapse for the fees to apply.