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Closed-Loop (Store Specific)

Various state and federal laws are in effect that apply to gift cards. The best summary of state laws as they apply to gift cards can be found at the Consumers Union website. This page appears to be updated frequently. The best place to read about and understand the new Federal rules can be found at the Federal Reserve.

ScripSmart also offers some very useful information on state gift card laws and a comparison of the state laws with the new Federal laws.

If you have an issue with an open-loop gift card that can't be resolved with the store directly, I would suggest filing a Better Business Bureau complaint (these really do work), as well as a complaint with your state's consumer affairs office (here is a list of these offices for every state), and the Federal Trade Commission.

If everyone filed a complaint against a company that behaved badly, then perhaps companies would be forced to hold themselves to a higher standard.

Open-Loop (Visa, Mastercard, American Express, Discover)

Most of the more recent legal protection crafted especially for gift cards applies only to closed-loop cards, or cards issued only for a single retailer, but the new Federal laws under the Credit Card Reform Act of 2009 do apply to open-loop carsds. I'm still baffled as to why state lawmakers haven't tried to tackle open-loop cards.

In reality, these cards are very hard to use when they only have a small value left on them as very few merchants will accept these cards along with another form of payment (if you even know what the balance is). There are also many documented cases of these cards ceasing to function for no apparent reason. For one card I had a problem with, the 800 number did not connect to a live person, and the email address listed on the card support website bounced back.

If you have a problem with a gift card, it is important to file a complaint so that the responsible company is held accountable. As with open-loop cards, you can file complaints with the BBB, your states office of consumer affairs, or the FTC.

However, since many of these cards are issued by banks, you can additionally file a complaint with the banks governing body, which should bring even better results.

American Express and Discover gift cards are issued directly by those companies, which are not banks. American Express itself offers suggestions of who to contact to complain. Here is one great site that lists complaints people have with American Express gift cards. Discover gift card are very rare.

Update 11/11/08: American Express won approval to become a bank holding company. As far as I can tell, this means that it will come under the direct supervision of the Federal Reserver. Here is some information about the Federal Reserve's complaint process.

Visa and Mastercard gift cards are issued by individual banks. To file a complaint with the banks governing body, you first must determine where the bank is chartered. The name of the issuing bank will be in very small print somewhere on the card. This handy search engine at the FDIC will help you find out if your bank is nationally chartered or chartered in a particular state. If the issuing bank is nationally chartered, the governing body is the Office of the Comptroller of the Currency. You can file a comlaint with them here.

For both nationally and state chartered banks, you can file a complaint with the Office of Thrift Supervision here. Additionally, that site has a link to search for the governing body of the institution that issued the card. Contact that governing body to file an additional complaint.

Good luck

Updated 5/10/10