Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
M - F 8 am - 5 pm
The holiday season is upon us and consumers are often barraged by a frenzy of flashy advertisements, persuasive sales pitches and seemingly irresistible rebates. Knowing your rights and being mindful of the fine print can help consumers benefit from the flurry of holiday shopping. The Minnesota Attorney General’s Office encourages consumers to review the following information regarding shopping and other consumer rights.
If you’ve ever felt confused or frustrated about what to buy for people, you may have already turned to the increasingly popular gift card as an answer to your problem. According to a National Retail Federation survey, gift cards were one of the most popular gifts last holiday season, with 77.3 percent of consumers buying one. Gift card purchases approached $25 billion last holiday season. Before purchasing a gift card for someone, there are some things you should consider.
- Fees. Make sure you know what fees may apply to the card. While some cards may not have fees, others may charge purchase fees, monthly maintenance fees, inactivity fees, or even balance inquiry fees. Under federal law, all fees must be clearly disclosed on the gift card or its packaging. Don’t be taken by surprise! Read the fine print!
- Expiration Dates. Under federal law, the money on your gift card will be good for at least 5 years from the date the card is purchased. Still, make sure you know whether there is an expiration date for the card and what that date is. If there is an expiration date, find out whether you will lose the remaining balance or if another card will be issued to you.
- Lost or Stolen Cards. Find out the rules for how the company deals with a lost or stolen card. Can they issue you a replacement card? If an unauthorized person uses the card, will you be compensated? Typically, you will not receive a replacement for lost or stolen cards.
- Where you can use the card. A store gift card often can only be used at the store in which it was purchased (or a sister store). Other gift cards, like those attached to major credit card companies, can be used at many places worldwide.
- Be sure to pass all information to the recipient. If information about fees, expiration dates, and other matters appear on a separate document, make sure the information is passed to the recipient of the gift card!
The Truth about Rebates
Attractive rebates for products such as cell phones, computers, and other gadgets often entice consumers into purchases from companies that promise money back or partial or full reimbursement at a later date. Despite the appearance of a good deal, companies may use the rebates to convince consumers to buy products with the hope that they will not take the time and effort to fulfill rebates, some of which contain many obstacles. Although some rebates for small purchases are processed immediately at the checkout counter, most rebates are completed through the mail. Some can be very confusing. Companies may require a significant amount of documentation from consumers, such as the original sales receipt, the UPC code, a company rebate form (sometimes confusing and only available through the company’s website), and other information, such as a “rebate certificate.” In some cases, consumers have been asked to send numerous letters at different times within a period of many years in order to claim a refund. Consider the following information before purchasing products from companies based upon the promise of a rebate:
- Know the company. Some companies may use other companies to fulfill their rebates. Ask questions about the reliability of the business. Call the Better Business Bureau to find out any information on the company.
- Question rebates with long time periods. The sooner you get the rebate, the better. One company offered a rebate that was redeemable only after ten years. Consumers who contacted the company ten years after buying the product were told that too many people had applied for the rebate and that they would only receive a portion of what was promised.
- Ask about insurance. Check to see if the company insures its rebates. If they say “yes,” ask for verification.
- Read and understand the terms and conditions. Find out what responsibilities are required of the consumer (i.e. requests for documentation such as original receipt, UPC codes, forms, etc.). In addition, ask how long it will take to receive the rebate. Federal law states that consumers should receive the rebate in the timeline promised, and if that is not indicated, within 30 days after sending documentation to the company.
Around the holiday season, many people find that the internet provides a variety of product choices 24 hours a day, 7 days a week. A click of a mouse can purchase anything from video games to power tools. There are currently hundreds of thousands of websites devoted to online shopping. In fact, recent surveys indicate online retail sales reached $33 billion last holiday season. Although shopping online may be convenient, consumers should be aware of potentially fraudulent practices they may encounter on the web. Consider the following suggestions:
Use Secure Websites
SSL’s are used to scramble information that you send over the internet to help secure your purchase. If your computer does not have a browser, you may be able to download a browser free on the internet. Closely review the security standards of any website or browser to ensure that it affords you the protection you require. Make sure that your computer is free of “spyware,” which fraudulent operators install to monitor and record consumers’ web transactions. Contact your internet service provider or purchase software that purges your computer system of spyware before making financial transactions online.
A Note about Credit Cards
Credit cards allow consumers to “charge” their purchases and pay for them later. When a consumer uses a credit card, he/she receives a billing statement, explaining the charges on the credit card account. Under a federal law known as the Fair Credit Billing Act (“FCBA”), consumers are granted certain rights in responding to errors on their credit card statements.
For instance, if credit card customers are charged for products that they did not order or receive, they may file a written dispute with their credit card company. If a customer files a written dispute with his/her credit card company within 60 days of identifying an error, the credit card company is obligated to investigate the matter and make appropriate corrections. Additionally, if a consumer’s credit card number is stolen, they are typically only responsible for a maximum of $50 in fraudulent charges if they report the theft in a timely manner. Some companies do not even hold their customers responsible for the first $50 incurred through fraudulent charges.
Check For Reliability and Shop With Companies You Know
Check out the company to make sure it is legitimate. Don’t be fooled by professional-looking websites. If you have never heard of a company and cannot obtain information, use caution before responding to it. It will do you no good to use a secure browser if the company on the other end receiving your credit card number is not legitimate or is a scam. Furthermore, review a company’s return policy before you place an order.
Print copies of your purchase order, confirmation number and all web pages you visit during the purchase for your records. Under the federal Mail/Telephone Order Merchandise Rule, merchandise must be delivered within 30 days, unless otherwise stated. In the event that delivery is delayed, the company is obligated to notify you. If it does not, take action immediately.
Keep Passwords Private
Never give your password to anyone. Avoid using passwords that are easy to guess or that use telephone numbers, birth dates, or a part of a social security number. The safest passwords use a random combination of symbols, letters and numbers. It is important to keep your password written down and kept in a safe place in case you forget it. Don’t save your username and password on shared or public computers.
For more information regarding consumer rights or to file a complaint, you may contact the Minnesota Attorney General’s Office at:
Office of Minnesota Attorney General Lori Swanson
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
TTY: (651) 297-7206
A Word about Restocking Fees
Charging consumers a restocking fee, usually 15 percent of the purchase price, for returning an opened product is a growing trend among a number of different retailers. Generally speaking, the restocking fee only applies to electronics, such as DVD players, digital cameras, and televisions, which the retailer cannot resell as new. Not all retailers, however, make consumers pay a restocking fee and not all fees are structured the same way. Thus, before you purchase that big present, be sure to ask the sales representative what rules apply if the recipient decides to return it.