As you may recall, the original e-mail (available on Ajalatlaw.com) regarding
gift certificates advised that gift certificates may not contain an expiration
date. In response to the then-new law, merchants began charging service
fees against the gift certificates, such as fees for non-use, or "dormancy
fees". That is, if an owner failed to use a certificate for a certain
amount of time, a monthly fee typically a small percentage of the total
was deducted from the balance. It may not sound like much, however, over
the course of several months, an entire certificate could be consumed by fees.
Once again, your legislators came through for you! Effective January 1,
2004, the law regarding gifts certificates was modified to respond to
the merchants' fees. It is still true that a gift certificate may
not contain an expiration date and if it does that date is ineffective.
In addition, the new law prohibits all service fees, including "dormancy
There is one exception: Dormancy fees may be charged against a gift certificate
that has not been used for 24 months, has a balance of $5 or less, and
has a visible statement printed directly on it advising of the fee. However,
the fee cannot exceed $1.00 per month.