Dormancy Fees on Gift Certificates
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Can a Company Charge Administrative "Dormancy" Fees for Old Gift Certificates?
It is common practice for companies to charge administrative "dormancy" fees on a gift card if it remains unused after a certain amount of time. However, a few states are passing laws that ban or limit dormancy fees on gift certificates. For example:
- California : No dormancy fees unless
- The card value is $5 or less when the fee is charged
- The fee is no more than $1 per month
- The card has not been used for 24 months
- Fee is noted on the card
- Connecticut : No dormancy fees
- Maine : No dormancy fees unless noted on the cards
- New Hampshire : No dormancy fees
- Washington : No dormancy fees
- Illinois, Rhode Island and Texas : Bill pending to ban or limit dormancy fees
About 15-20 states have also passed laws that ban or limit expiration dates on gift certificates.
Should I Contact a Consumer Protection Lawyer?
Given the costs of consulting an attorney, you may want to try to speak with a manager if a company refuses to honor your gift certificate or is charging dormancy fees for your old gift certificate. Recite the state law banning dormancy fees on gift certificates, if applicable, and tell the manager the basis of your claim. However, if the company is uncooperative and you still want to pursue your claim, contact a lawyer. It can be difficult to determine which laws apply to your situation, especially where the gift certificate is purchased in one state and used in another state. An experienced consumer protection attorney can explain your rights to you and help you successfully pursue your claim.
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Last Modified: 01-23-2013 02:52 PM PST
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