After years of consumers losing money on expired gift cards, in 2008 the Saskatchewan government passed legislation regarding the prepaid gift cards.
The legislation covers prepaid purchase cards, including both electronic and credit cards, as well as written gift certificates, vouchers and other devices that carry a monetary value. The law says that no purchased gift card or certificate can expire.
However, there are some catches.
The exception to the rule
An expiry date is allowed for prepaid gift cards and certificates if they are issued for charitable purposes or in cases where the consumer is not paying for the card.
So if you are shopping at a store and receive a free prepaid purchase card or certificate at the checkout, chances are it will have an expiry date, and therefore may not be the most prudent stocking stuffer.
Eric Greene, director of Saskatchewan's Consumer Protection Branch in Regina, says if you don't pay anything for a card, you should be wary.
"If [a consumer] has not expended any monies, they are not losing any value and therefore the gift card can expire in that instance," Greene said.
Fees are allowed on free, prepaid gift cards and certificates. For example, if you have received a free $25 prepaid credit card with a $2.50 fee each month, all the money could be gone long before the expiry date comes up.
Also, it is lawful for a prepaid gift card or certificate to be subject to an activation fee at the time of purchase.
The cash-back loophole for prepaid credit cards
The legislation protecting the balance on prepaid gift cards and certificates from expiring applies to pre-loaded money cards branded or issued by credit card companies, as long as the card does not have a cash-back option.
If the card allows a consumer to take cash from the card, it is not protected by the same legislation and may be subject to expiry dates and user fees.
Greene says people should think of prepaid credit cards with a cash-back option in the same way they think of a chequing account.
"For example, if you have a chequing account with a monthly fee that account is debited and you are subject to [those] fees, or it can be terminated in the case of a gift card," Greene explained.
What about prepaid phone cards?
The government's Consumer Protection Division says the legislation does apply to prepaid phone cards. However, if the card is activated and then used to keep a phone line available for a specific period of time, the monetary value associated with that card is only good for that period of time; regardless of whether or not the associated talk or text minutes are used.
For example, if you buy a 30-day phone card with 500 text and talk minutes, and at the end of the 30 days you have only used 20 minutes of the purchased time, you will not be reimbursed for the unused 480 minutes.
However, if the card is not activated it does not expire.
I bought a card with an expiry date, now what?
Many retailers still have an old stock of gift cards and certificates that do show an expiry date on them. Merchants are allowed to sell the old cards, however the expiry date cannot lawfully be enforced.
The Consumer Protection Division advises customers to keep their receipts if they buy such a card or certificate so that they can prove they bought the card after November 10, 2008 (the date the new legislation came into effect).
If a consumer is having problems with a prepaid card or certificate they can call the Consumer Protection Division in Regina at 306-787-5550.
A previous version of this story incorrectly stated that the legislation respecting consumer protection and gift cards was a federal law. It's provincial legislation.Dec 18, 2013 7:57 PM CT