Companies taking money from Gift cards defacto Fees/expiration date?

[HotelSwatTeam]

Can you give one example of a card that has done this? Thanks.

HotelSwatTeam might be talking about the "activation" or purchase fees on gift cards like Visa and MasterCard.

Negative, those are open loop cards. Those have separate rules than closed loop cards like restaurants/retail gift cards.

I am not confusing the 2 in any way, shape or form.

 

[quincy]

Negative, those are open loop cards. Those have separate rules than closed loop cards like restaurants/retail gift cards.

I am not confusing the 2 in any way, shape or form.

Okay.

 

[HotelSwatTeam]

Possibly slim.

I suspect HotelSwatTeam is busy looking for other potential suits or class action suits he could collect on.

In my entire life, I have never even done 1 lawsuit however I do know a lady who I work with who was basically did lawsuit full time. She even went to school to study paralegal so she could do it full time.

Unfortunately I have encountered several examples of companies becoming very bold and acting very poorly on many different cases.

Maybe its a coincidence but during the last 3 years, I have seen a flood of very bad behavior.

 

[quincy]

In my entire life, I have never even done 1 lawsuit however I do know a lady who I work with who was basically did lawsuit full time. She even went to school to study paralegal so she could do it full time.

Unfortunately I have encountered several examples of companies becoming very bold and acting very poorly on many different cases.

Maybe its a coincidence but during the last 3 years, I have seen a flood of very bad behavior.

There have always been companies that have behaved badly. Money is a powerful motivator for some, even when profits come at the expense of people's lives.

 

[HotelSwatTeam]

That kind of thing has been illegal for many years under federal law.

When did any of this happen to you? I'd like examples, too, with dates and amounts.

I can give you many examples. I apologize in advance if this makes thing too complicated but if you want to know, I would be glad to tell you.
Keep in mind that I am trying to keep things simple and understandable but fell free to ask additional questions.

The reason given are basically
1. To stop reseller from selling their gift card.
2. To save space because of an outdated server mainframe?
3. In the name of security.
4. system glitch/poor design.
However the end result has been having a lot of money spent on gift cards in which the company keeps the original gift card purchase plus finds a way to never has to deliver the service unless caught.

1. Asian theme restaurant did not like how 3rd party resellers were selling their Gift cards so they decided to stop honoring any gift card sold by a 3rd party. As far as I know, the company has received full payment for the gift card however one day unilaterally decided to stop honoring the gift cards.( They actually added a disclaimer on their site immediately after I pointed out to their corporate headquarters how they unilateral and without noticed decided to stop honoring gift cards which are otherwise perfectly good. There is no allegation of fraud, just basically spite for gift card resellers. This company also disabled their automated gift card balance inquiry phone number. There is a new message that pops up saying you had to contact their corporate headquarters with a scanned copy of the front/back of the card and the receipt in order to even get the balance.

2.Target: Gift card showing as 0 during checkout. Only after calling you would find out the card was “ archived’ because it was not used in a while. The archival process basically mean the show will show up as having zero balance on it when it might have $500 actually assigned. There is a process of calling up and getting it activated again but just think how many unsuspected people have throw out their gift card when they think there is nothing left on it. In fact, my family member actually had to get into an argument with a cashier who tried to take the card because she said it had 0 on it. When I got the card, I called to check the transaction and I found it was simple " archived" and one reactivated, it had a lot of money left on it. I am sure many people have lost their gift card as a result of this practice of making the perfectly good card appear as having no money on it because its archived.

3.Starbucks lets you combine smaller gift cards. If you have $1,000 worth of valid gift cards you purchased $5 gift card that you got off ebay and attached that to your account. The $5 happen to be purchase with a stolen credit card, so they would take your entire $1005 gift card account and freeze the entire amount even though only $5 was bad and keep the entire amount forever unless you show your original receipt. If you received it as a gift or got it from a reseller, you are not going to have an original receipt.
If the company is concern about credit card chargeback’s, that can only be done for a limited time such as 6 months. Starbucks will never release your funds, not in 6 months, not in 6 years, not in 60 years. Far after any possible chargeback could possible happen. I told the rep “ Listen, at some point in time, you have to realize there is not going to be a chargeback on this gift card”

4. Big box national Petstore chain (my most recent experience): Will systematically charge for an attempted order but never actually placed. I have had this happen to be several times. I try to place an order online but get a generic error message saying how the order was not complete and to call their number if I required assistance. I found when trying to place the order a second time that my gift card that I had originally like $50 going towards the order had $0 going towards the order when I tried to replace the order. The only way I even caught this was because it went from something $50 of the order to covering $0 while placing the same order within 2 minutes. If the gift card had $200 on it and covered my order on the 1st and 2nd attempt, I would not have noticed the false charge.

• The gift card customer support also has no ability whatsoever to tell you transaction history on your gift card so in other words, you can’t check to make sure that you were not fraudulently charged. This acts to cover up the wrongful charge.
• The CSR said it was a 1 time glitch and they entered a ticket to fix the problem. When it happen recently I spoke to someone at corporate who was very arrogant in telling me that was how their system worked and somehow I should have known by the vague generic error message during checkout that money was charged and not coming back dispute never stating anything to suggest that. I am unsure how many times I have been fraudulently charged for an order that did not go though and asked if she could check my past gift cards but she refused saying that I somehow should have known. I do not believe that any reasonable person could have known that money would be permanently removed from their card without an order ever being placed by some value error message saying how the order did not complete.
• The error message only said that there was a problem and my order was not placed, no indication that my gift card was charged and that the money would not be returned to me unless I called up immediately to have them manual put the stolen money back on my card.
• I am sure if the company was forced via court action to generate a report showing how many gift cards have been charged without a justification of a corresponding order, the amount would be substantial.

Again the history of gift card has originally been a way to get money quickly on a product/service that would never be delivered due to an onslaught of fees or expiration date. When government stepped in and started to safeguard the gift cards, it seems that they have come up with new reasons why to deny the cards. The sad part is that many of these cases, people might end up throwing out their own gift card without ever realizing that money was taken from them by design.

 

[quincy]

I can give you many examples. I apologize in advance if this makes thing too complicated but if you want to know, I would be glad to tell you.
Keep in mind that I am trying to keep things simple and understandable but fell free to ask additional questions.

The reason given are basically
1. To stop reseller from selling their gift card.
2. To save space because of an outdated server mainframe?
3. In the name of security.
4. system glitch/poor design.
However the end result has been having a lot of money spent on gift cards in which the company keeps the original gift card purchase plus finds a way to never has to deliver the service unless caught.

1. Asian theme restaurant did not like how 3rd party resellers were selling their Gift cards so they decided to stop honoring any gift card sold by a 3rd party. As far as I know, the company has received full payment for the gift card however one day unilaterally decided to stop honoring the gift cards.( They actually added a disclaimer on their site immediately after I pointed out to their corporate headquarters how they unilateral and without noticed decided to stop honoring gift cards which are otherwise perfectly good. There is no allegation of fraud, just basically spite for gift card resellers. This company also disabled their automated gift card balance inquiry phone number. There is a new message that pops up saying you had to contact their corporate headquarters with a scanned copy of the front/back of the card and the receipt in order to even get the balance.

2.Target: Gift card showing as 0 during checkout. Only after calling you would find out the card was “ archived’ because it was not used in a while. The archival process basically mean the show will show up as having zero balance on it when it might have $500 actually assigned. There is a process of calling up and getting it activated again but just think how many unsuspected people have throw out their gift card when they think there is nothing left on it. In fact, my family member actually had to get into an argument with a cashier who tried to take the card because she said it had 0 on it. When I got the card, I called to check the transaction and I found it was simple " archived" and one reactivated, it had a lot of money left on it. I am sure many people have lost their gift card as a result of this practice of making the perfectly good card appear as having no money on it because its archived.

3.Starbucks lets you combine smaller gift cards. If you have $1,000 worth of valid gift cards you purchased $5 gift card that you got off ebay and attached that to your account. The $5 happen to be purchase with a stolen credit card, so they would take your entire $1005 gift card account and freeze the entire amount even though only $5 was bad and keep the entire amount forever unless you show your original receipt. If you received it as a gift or got it from a reseller, you are not going to have an original receipt.
If the company is concern about credit card chargeback’s, that can only be done for a limited time such as 6 months. Starbucks will never release your funds, not in 6 months, not in 6 years, not in 60 years. Far after any possible chargeback could possible happen. I told the rep “ Listen, at some point in time, you have to realize there is not going to be a chargeback on this gift card”

4. Big box national Petstore chain (my most recent experience): Will systematically charge for an attempted order but never actually placed. I have had this happen to be several times. I try to place an order online but get a generic error message saying how the order was not complete and to call their number if I required assistance. I found when trying to place the order a second time that my gift card that I had originally like $50 going towards the order had $0 going towards the order when I tried to replace the order. The only way I even caught this was because it went from something $50 of the order to covering $0 while placing the same order within 2 minutes. If the gift card had $200 on it and covered my order on the 1st and 2nd attempt, I would not have noticed the false charge.

• The gift card customer support also has no ability whatsoever to tell you transaction history on your gift card so in other words, you can’t check to make sure that you were not fraudulently charged. This acts to cover up the wrongful charge.
• The CSR said it was a 1 time glitch and they entered a ticket to fix the problem. When it happen recently I spoke to someone at corporate who was very arrogant in telling me that was how their system worked and somehow I should have known by the vague generic error message during checkout that money was charged and not coming back dispute never stating anything to suggest that. I am unsure how many times I have been fraudulently charged for an order that did not go though and asked if she could check my past gift cards but she refused saying that I somehow should have known. I do not believe that any reasonable person could have known that money would be permanently removed from their card without an order ever being placed by some value error message saying how the order did not complete.
• The error message only said that there was a problem and my order was not placed, no indication that my gift card was charged and that the money would not be returned to me unless I called up immediately to have them manual put the stolen money back on my card.
• I am sure if the company was forced via court action to generate a report showing how many gift cards have been charged without a justification of a corresponding order, the amount would be substantial.

Again the history of gift card has originally been a way to get money quickly on a product/service that would never be delivered due to an onslaught of fees or expiration date. When government stepped in and started to safeguard the gift cards, it seems that they have come up with new reasons why to deny the cards. The sad part is that many of these cases, people might end up throwing out their own gift card without ever realizing that money was taken from them by design.

When it happens to you personally, complain. When it happens to other people, these other people can complain. If it happens to you and you are aware of several others it has happened to, consult an attorney in your area.

Usually gift cards will come with terms of use. Read those terms of use carefully before purchase.

 

[HotelSwatTeam]

When it happens to you personally, complain. When it happens to other people, these other people can complain. If it happens to you and you are aware of several others it has happened to, consult an attorney in your area.

Usually gift cards will come with terms of use. Read those terms of use carefully before purchase.

In the case of the Asian restaurant, I did complain about the terms and they actually added a disclaimer on their website as a result of it but the problem is that disclaimer was not there when the gift card was originally purchased. They put it in after the fact and applied it retroactively.

In the case of the Petstore chain, its just flat out taking money off the card and blaming it on a computer glitch as well as making it impossible to get the transaction history so no one can catch the issue.

There are no terms which say that something like this is ok. I would say that pretty much every company used has safeguards in place that will either prevent a false charge on a credit card/gift card or if a charge is made, that it will eventually reverse once the system realizes there is no order to justify the charge.

I think they are an outlier in how they will charge your card without warning and then take away the tools used to catch this fraud.

If this is done by design, it would be criminal, if its done by accident, it would be negligence. I also placed them on notice for this years ago and it continues to happen to this day. My conversation with their corporate indicates they are aware this happen and have no intention of correcting the problem.

I am thinking statutory damages in small claims court or class action unless there is a reason that this could be considered frivolous? However I feel that I have been wronged here and the company is a bad actor by my non-lawyer assessment of the situation.

This is why I am reaching out on this forum hoping for a second set of eyes on the problem.

Thanks.

 

[quincy]

In the case of the Asian restaurant, I did complain about the terms and they actually added a disclaimer on their website as a result of it but the problem is that disclaimer was not there when the gift card was originally purchased. They put it in after the fact and applied it retroactively.

In the case of the Petstore chain, its just flat out taking money off the card and blaming it on a computer glitch as well as making it impossible to get the transaction history so no one can catch the issue.

There are no terms which say that something like this is ok. I would say that pretty much every company used has safeguards in place that will either prevent a false charge on a credit card/gift card or if a charge is made, that it will eventually reverse once the system realizes there is no order to justify the charge.

I think they are an outlier in how they will charge your card without warning and then take away the tools used to catch this fraud.

If this is done by design, it would be criminal, if its done by accident, it would be negligence. I also placed them on notice for this years ago and it continues to happen to this day. My conversation with their corporate indicates they are aware this happen and have no intention of correcting the problem.

I am thinking statutory damages in small claims court or class action unless there is a reason that this could be considered frivolous? However I feel that I have been wronged here and the company is a bad actor by my non-lawyer assessment of the situation.

This is why I am reaching out on this forum hoping for a second set of eyes on the problem.

Thanks.

There generally are not statutory damages. You must show actual losses.

 

[HotelSwatTeam]

There generally are not statutory damages. You must show actual losses.

[Link removed]

Potential Civil Liability Exposure for Violation of the EFTA The potential exposure for a merchant accused of violating the EFTA may be substantial, especially in a putative class-action context. Indeed, the EFTA provides for a private right of action by consumers for any failure to comply with the gift-card provisions of the statute.40 In an individual action, a merchant may be liable for “the sum of” (1) actual damages sustained by the consumer, (2) statutory damages of not less than $100.00 and not more than $1,000.00, and (3) reasonable attorneys’ fees and costs.41 The potential liability exposure in a class action differs only with respect to the available statutory damages. Statutory damages for putative class members may be apportioned in “such amount as the court may allow,” are not limited to the $100.00 minimum amount for individual class members, and are subject to a cap of the lesser of $500,000.00 or 1% of the net worth of the.....

While gift cards and related products are subject to a variety of state laws and regulations, this alert focuses primarily on the overarching provisions of federal law as codified in the Electronic Fund Transfers Act (“EFTA”)5 and Regulation E. ..............

So basically I see Gift card law Electronic Fund Transfers Act (“EFTA”) (2) statutory damages between $100-$1,000)

 

[quincy]

If you have a complaint about gift card "fees," and you believe your complaint can support a legal action (if not a personal action then perhaps a class action), you can search out an attorney in your area who agrees that there is a suit worth pursuing.

Good luck.

 

[quincy]

...While gift cards and related products are subject to a variety of state laws and regulations, this alert focuses primarily on the overarching provisions of federal law as codified in the Electronic Fund Transfers Act (“EFTA”)5 and Regulation E. ..............

Potential Civil Liability Exposure for Violation of the EFTA The potential exposure for a merchant accused of violating the EFTA may be substantial, especially in a putative class-action context. Indeed, the EFTA provides for a private right of action by consumers for any failure to comply with the gift-card provisions of the statute.40 In an individual action, a merchant may be liable for “the sum of” (1) actual damages sustained by the consumer, (2) statutory damages of not less than $100.00 and not more than $1,000.00, and (3) reasonable attorneys’ fees and costs.41 The potential liability exposure in a class action differs only with respect to the available statutory damages. Statutory damages for putative class members may be apportioned in “such amount as the court may allow,” are not limited to the $100.00 minimum amount for individual class members, and are subject to a cap of the lesser of $500,000.00 or 1% of the net worth of the


So basically I see Gift card law Electronic Fund Transfers Act (“EFTA”) (2) statutory damages between $100-$1,000)

Your post has been quoted above without the attorney link.

 

[HotelSwatTeam]

Your post has been quoted above without the attorney link.

The links are not allowed on this forum? I was just trying to provide proof of what I was saying.

If you google " DON’T LOOK A GIFT CARD IN THE MOUTH: BEWARE OF LIABILITY UNDER THE ELECTRONIC FUND TRANSFERS ACT " then you can find the article.

However, back to my original question. If a company without justification pulls money off your gift card is that considered to be a gift card fee or expiration date,etc... or at least generally bad in the eyes of the law?

Bottom line is that I am asking if companies can basically do whatever they want with the money of a gift card without question as long as they don't call it a fee/expiration date however the end results is the same or worse.

The way I look at this is the best case scenario its a de facto fee/expiration date and the worst case, outright thief/ embezzlement?

 

[quincy]

The links are not allowed on this forum? I was just trying to provide proof of what I was saying.

If you google " DON’T LOOK A GIFT CARD IN THE MOUTH: BEWARE OF LIABILITY UNDER THE ELECTRONIC FUND TRANSFERS ACT " then you can find the article.

However, back to my original question. If a company without justification pulls money off your gift card is that considered to be a gift card fee or expiration date,etc... or at least generally bad in the eyes of the law?

Bottom line is that I am asking if companies can basically do whatever they want with the money of a gift card without question as long as they don't call it a fee/expiration date however the end results is the same or worse.

The way I look at this is the best case scenario its a de facto fee/expiration date and the worst case, outright thief/ embezzlement?

No. Companies cannot "do whatever they want" with gift cards.

I suggest you have your gift card complaints personally reviewed by an attorney in your area.

Good luck.

 

[Zigner]

HotelSwatTeam - I believe that this thread has run it's course. There really is nothing more that can be said here. It is upon you to seek out guidance from a local attorney.

I also wish you luck.

 

[HotelSwatTeam]

No. Companies cannot "do whatever they want" with gift cards.

I suggest you have your gift card complaints personally reviewed by an attorney in your area.

Good luck.

Local attorney, class action lawsuit or whatever I can get?

I feel that if I had a company issue gift cards and I decided to use those funds as my personal piggy bank without allowing people to redeem the cards, I would be in jail.

Thank you for letting me know I am on the right track and providing a second set of eyes on the problem.