Special Report: Gift Card Caution

They make holiday shopping simple -- but Massachusetts Attorney General Tom Reilly is warning customers to be careful when buying store gift cards.

Thomas Reilly, Mass. Attorney General
"Our position is that anything that diminishes the value of the card is in violation of Massachusetts law and we urge consumers to be very careful and to ask question when purchasing the cards."

Last week, the Attorney General's office filed a lawsuit against Simon Malls, owners of 15 Massachusetts malls, including the South Shore Plaza.

The lawsuit says Simon's gift cards violate state laws because they expire in 12 months -- not the required seven years. The cards also have a monthly service fee.

Thomas Reilly, Mass. Attorney General
"If you bought it on day one, it was worth $25, even though at the very least you paid $1.50 in addition to that. By month eleven, it's worth $12.50, and one year later it's worth zero."

In the last year, Simon Malls have sold 500,000 gift cards. The company says the cards are not traditional gift certificates and should not fall under the same laws.

Michael Regunberg, Simon Property Group, Inc.
"When a gift certificate to someplace like the Gap is lost or stolen you're out of luck. When a gift card is lost or stolen you can actually get it replaced. So it's really not a fair comparison."

The monthly service fee on Simon gift cards starts after six months. So if you spend the card quickly -- you will save money. Massachusetts is also not the only state taking Simon to court. Lawmakers in New Hampshire and Connecticut have also filed their own lawsuits.

For more information:
http://www.ago.state.ma.us/sp.cfm?pageid=986&id=1332