New Hampshire's unique gift certificate law protects consumers

April 26. 2011 4:43PM
Shoppers leave Kohl's, during the day after Christmas shopping at the Bedford Mall in Manchester. (Thomas Roy/Union Leader)

A little publicized New Hampshire law makes it is illegal for businesses to place expiration dates on any gift certificate that was purchased for less than $100. The only exception is for gift certificates that were donated, according to New Hampshire Senior Assistant Attorney General Kristin Spath.

"We have been really trying to get the word out to both consumers and businesses," said Spath, chief of the state's Consumer Protection Bureau.

If gift certificates over $100 remain unclaimed after five years, businesses must turn that money over to the state's Division of Abandoned Property.

"I am willing to bet there are very few businesses or companies that are even aware of that law," Spath said.

The law applies to any type of business that offers goods or services for sale, and New Hampshire makes no distinction between "gift cards" and gift certificates, Spath said. Even chain stores that may issue gift certificates from out of state must comply with New Hampshire's law, she said.

Spath said some companies try to get around the law by imposing periodic charges on gift certificates that remain unused for a certain amount of time. Spath said her office opposes this practice, but New Hampshire's law does not specifically address it.

New Hampshire's law was enacted in 1997. Other states with similar laws include Massachusetts, Rhode Island, California and Hawaii. In most other states, gift certificates typically expire in six months to two years.

Not all businesses have complied with the law. In California, expiration dates on gift certificates have sparked a flurry of class-action lawsuits. A lot of money is at stake, with the rise of prepaid debit cards turning gift certificates into increasingly popular items.

The Associated Press reports that shoppers nationwide are expected to spend somewhere between $20 billion and $30 billion on gift certificates this year. By some industry estimates, 10 percent to 15 percent of gift certificates sold nationwide aren't redeemed -- pure profit for the retailers.

Spath said New Hampshire businesses that violate the gift certificate law can be charged with a misdemeanor criminal offense. They also can be liable for the value of the gift certificate or a fine of up to $1,000, she said.

Follow us on Twitter Follow us on Facebook Follow our RSS feed
Union Leader app for Apple iPad or Android *
Click to download from Apple Apps StoreClick to download from Android Marketplace
* e-Edition subscription required