The'hottest gift' this year in NH are gift cards
The NRF surveyed shoppers and found they'll spend an average of $156.86 on gift cards.
And if you're buying those cards in New Hampshire, a state law gives you protections that people who live elsewhere don't have.
Gift certificates valued at $100 or less purchased here cannot have an expiration date, under the state Consumer Protection Act. And the same law, RSA 358-A, bans so-called "dormancy" or "latency" fees or other service charges that reduce the gift certificate's redemption value.
For policymakers here, it was a matter of fairness, says David Rienzo, assistant attorney general in the consumer protection and anti-trust bureau.
"It just seems unfair to give a merchant, let's say, $50, get a card that says you've got $50 worth of credit in our establishment, and then 'fee' that down over a period of time so that eventually the card is worthless," he said.
Another issue, he said, was "the fact it was the person that was given the gift that suffered the loss."
However, New Hampshire's law was in limbo for about four years, Rienzo recalled. Simon Property Group, which managed malls in Manchester, Salem and Nashua, sued the state in 2004 over the ban on fees - and eventually won.
After New Hampshire lost its appeal in federal court in 2007, Rienzo recalled, "we didn't have that protection."
Meanwhile, however, Congress was busy writing new regulations governing credit cards. And when the Credit Card Accountability, Responsibility and Disclosure Act of 2009 - the CARD Act - was enacted, it included new federal rules for gift certificates, store gift cards and prepaid cards.
Under those rules, which took effect in August 2010, the value of a bank or retail gift card cannot expire for at least five years from the date the card was issued or the last date any additional money was loaded onto the card. Inactivity fees cannot be charged until a card hasn't been used for at least one year and can only be charged once a month. And the expiration date and fees have to be clearly disclosed on the card.
But perhaps more importantly, Rienzo said, what the CARD Act also did was to define gift cards as an electronic fund transfer instrument. That brought them under the jurisdiction of the Federal Reserve Bank.
And under that agency's rules, Rienzo said, any state law that is more protective of consumers than its own regulations is not pre-empted. "So basically what they did ... was to resurrect our statute," he said.
Card issuers here are allowed to charge upfront fees to cover their administrative costs, Rienzo said.
"It's a transparency thing," he said. "It gives the consumer an opportunity to understand exactly what they're paying to buy this gift, and it does encourage them to shop around."
Nancy Kyle, president and CEO of the Retail Merchants Association of New Hampshire, said gift cards often increase sales for retailers. "Because people tend to spend more than the value of the gift card when they go in somewhere," she said.
And they're certainly popular with shoppers, Kyle said.
"Especially because people tend to be scattered about the country now. We don't live next to the people we might be giving something to, so we don't know their sizes, we don't know what they like.
"So a gift card is just a very good answer for that."
Kyle encouraged shoppers to be sure to include the receipt for a gift card with a gift. "That way, if there's ever any question about how much the gift card is for, you have a record of it," she said.
She also cautioned people to beware of the growing problem of gift card fraud. Criminals steal blank gift cards and sell them online, she said.
"If you have an opportunity to buy a gift card online on Craig's List or Amazon, and they're selling $25 gift cards for $10, those have probably been stolen," she said...