I got a $50.00 gift card from lowes in mid October, that I have not used yet. I have heard that wall and possibly some other stores are charging interest on gift cards. (they loose valve,each month) Does anyone know if this is true with lowes or not.
BTY this IS B*** S*** (stores that are doing that) as that card WAS PAID FOR IN FULL, It's not like is being financed or anything. Thanks, Tony D.
My wife sells gift cards as a fund-raiser to support our local private high-school. She looked at the Lowe's Scrip she sells and could not find anything that indicates that it will expire. Most such gift cards will have information on the back indicated that if it is not used within 24 months of date of issue, an $x per month fee will be deducted from the card's value. Generally these fees don't start for at least 12 months following date of issue, so if you plan to use it in the next year you should be good to go. Try calling the number on the card, they should be able to tell you whether an expiration date kicks in.
Yeah, it really is bad for the type of programs the high school is benefiting from because the date of issue is when the scrip issueing company issues the card, which could be some time before a purchaser actually gets the card in hand.
It's a matter of the accountants running the world again. You are correct in the fact that the company has received the money; these certificates show up as income in the year in which they are sold. However, after that time, they show up as a liability on the company's bottome line. So, a large number of uncashed gift cards starts adding to the company's liabilities in future years, thus they start reducing that liability by charging a monthly "service" fee until the card is exhausted.
>Hey good deal, Thanks,
Tony D.
Some stores were doing that after 12 or 24 months of non-use. In CT, it is forbidden by law now.
I imagine they are carried on the books for some period of time and it is a way of the sellers to clear up the account and the cash reserves if they have been lost or not used for a long time. Ed
Could be. I got a gift card worth $100 to a store. After 6 months I treied to use it and it expired. Gift Cards are not good gifts, although very good for the store. Why not call Lowes to find out?
In many states, such as Pennsylvania, there is an"unclaimed property" law requiring that all unclaimed property be turned over to the state after some period of time. Unclaimed property specifically INCLUDES unused gift cards (as well as checks that you have issued and the recipient has not cashed). The "wasteing" clauses of these gift cards is a way around that requirement and are often set up such that the card becomes worthless right about at the time that it would have had to have been turned over to the state. The PA Treasurer has made a real big deal out of enforcing the law in the last 6 or 8 years and you can get in real big trouble just writing off uncashed checks now.
Dave Hall
I recall a discussion with an acquaintence who worked for American Express at the time.
He claimed that AMEX made billions of dollars every year investing the face value of unused travelers checks.
OK, Just got a $30.00 Gift Card for Wall-Mart. Says on the back loose's $1.00 a month after 24 months. Thats not too bad. Don't see anything on the back of the lowes card.
Could be. I got a gift card worth $100 to a store. After 6 months I
Thats Not Good.
Thanks, Tony D.
>It could also be illegal. Gift certificates and gift cards have no expiration date in the state of California. Check with your states consumer affairs office.
John
The TV stations have been having a field day exposing these gift card scams. The biggest mall chain in Georgia offers gift cards. After 6 months, there is a 2.5% per month service charge. The TV station recommended not buying gift cards if there is an type of service fee or any type of expiration date. For Pete's sake, they've already got your money and are making interest and now they want to charge you even more. They also pointed out that approximately 10% of all gift cards are never redeemed. That is an estimated 4 Billion dollars a year in free profit for the companies.
Now you know the rest of the story... Just like rebates, many are never redeemed. It's a retailers windfall.
Greg G.
I got a $25 gift card to Lowe's... The giver didn't keep the receipt, and I lost the damn thing somehow.
It's in this room somewhere. Has to be. It's depressing to think that if I ever find it, it will probably have no value.
(Yeah, my den *is* a mess.)
Not anymore in CT.
Now it would be a windfall for the STATE!
Barry
But only if the retailer can "expire" the card, otherwise that money is a liability on the books, albeit a liability that is earning interest. However, unless the unredeemed card is not allowed to be expired, the company cannot claim that money as its own.
Oops, that last sentence should read "However, unless the unredeemed card IS allowed to expire, the company cannot claime the money as its own"
No, it isn't. They cannot count it as profit - they must account for it as a 'liability' ($$ owed) on the accounting books. That's why they started putting expirations on them -- because a whole lot of morons lost them or didn't redeem them - which was an accounting nightmare that the companies never expected to have to deal with. As usual...a few clowns ruined it for the rest of us.
Why would it be a nightmare...simply set up a corporate wide *single* account for all gift card monies to be deposited/withdawn. Earn interest on same while it sits there. Claim interest as profit.
For those monies that are never redeemed, the money is still there should the gift certificate be found. But all the while, it is being used to generate interest monies for the company. Done right, a MBA with an eye on being the CEO could do some stats on geographical areas and marketing campaigns which, surprise surprise, lead to a high level of non-redemption, and in the words of the 90's "pump up the volume," but not too high as to trigger any gov't department or consumer watch group. Please note the sarcasm in the previous sentence, as most that would want to implement such a strategy would be far too greedy to keep their actions in check.
There would be some accounting maintenance, and the cost of that maintenance would be covered by the profit gained from the interest, and lowering the amount of profit taxed via whatever convuluted accounting laws in your country.
It may be done with the money pretty much as you say, but each individual card must be tracked as purchases are made. That means tens of thousands of cards in the computer. There is a cost to doing that. Who should bear that cost? You and I that don't use them or use them promptly? Or the dummies that lose them or never bother to purchase against them? Don't tell me the company should as they don't pay for anything. All costs are passed on to the consumer one way or another.
What they are doing is no different than what banks do for accounts below the minimum and have no activity. After a period of time, there is a service charge and it is legal to do so. As they stand presently, the cards are not registered and the store has no way to contact you to send a reminder. I agree that 6 months is too short, but after 24 months, a small charge should be made for maintenance. Ed
Agreed! It's basic Accounting 101.
In these days of computerized accounting, I wouldn't exactly call it a NIGHTMARE. It's not like Ebenzer Scrooge has to manually tally and record the totals.
Heck, any small biz that uses Quick Books or Peachtree can easily carry gift certificate balances. I'm sure the systems the BORGS or
*-Marts have in place deal with it quite easily.In the meantime, the merchants can at least earn money market rates on the balances.
Barry
Please refer to the last paragraph of my previous post to see where the source of the funds originates to cover the cost comes from.
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