Sen. Ray Holmberg, R-Grand Forks, N.D, letter: Consumers should know what they buy
Prior to 2005, consumers were frustrated to discover that the gift cards they gave or received as presents were later worthless because the cards had either expired or had been assessed service fees that dissolved the card's value. As a result, I...
Prior to 2005, consumers were frustrated to discover that the gift cards they gave or received as presents were later worthless because the cards had either expired or had been assessed service fees that dissolved the card's value. As a result, I sponsored legislation in the 2005 legislative session to establish North Dakota's new gift card law prohibiting gift card expiration dates sooner than six years after the date of purchase. This law also prohibits the gift card seller from deducting any maintenance or service fees on the cards. This new law took effect April 6, 2005.
Unfortunately, I'm aware of some complaints by consumers who receive gift cards - or as they are now called, "mall cards" - from West Acres mall and discover the cards are subject to a $2 monthly "maintenance fee," after the first 12 months. While individual merchants in West Acres are prohibited from charging service fees on their store-specific gift cards, West Acres mall is not legally prohibited from charging these fees under an exception to the law that excludes general-use prepaid cards such as those typically issued through a credit card company. Such cards are not subject to the law prohibiting expiration dates or service fees, and West Acres mall cards meet that exception.
Consumers should understand this situation, and I hope I've helped clear up some confusion. The maintenance fees charged on the West Acres mall cards are not illegal in this particular circumstance.
As with all purchases, consumers should consider which gift will provide the most value to them or to the recipient of their card gift - a gift card that doesn't charge service fees, or one that does. It isn't a difficult choice for me.