“Prepaid cards” include any kind of card, cheque, certificate, etc., that lets you buy a product or service in exchange for a payment made in advance.

For example:

• gift cards valid for use in a specific store (e.g., a bookstore)
  
• cards valid in all the stores in a certain place (e.g., a shopping centre)
  
• cards that can be exchanged for a specific product or service (e.g., a massage)
  
• cell phone cards
  
• public transit passes
  
• prepaid credit cards (Yes, they exist!)

Take note: cards you get free when you buy a product or in return for points (or another kind of award system) are not covered by the rules described here.

Anyone selling a prepaid card must tell you about the restrictions on its use and how you can check the amount available on the card.

If there is not enough room on the card to give you all this information, the information must be given to you separately in writing.

If you ask for it, the seller must pay you in cash any amount under $5 left on the card, unless it is a cell phone card or a prepaid credit card.

Prepaid cards cannot have expiry dates, except for:

• cell phone cards
  
• cards giving unlimited access to a service (e.g., a bus pass)

Also, for cards that can be exchanged for a specific product or service, the merchant can ask you to pay the difference between the cost of the product or service when it is purchased using the card and the price of the product or service when the card was purchased.

Careful! The price of the product or service at the time the card is purchased, the date after which the merchant can ask for the difference, and the merchant’s intention to ask for the difference must appear on the card.

Example

At the bottom of a drawer, Nadia found an old gift certificate for a pedicure. Thrilled, she ran out to a spa.

Scenario A: The gift certificate says “Good for a pedicure (value $35). Valid until December 31, 2010.”

This expiration date is not valid. Nadia can get a free pedicure.

Scenario B: The gift certificate says “Good for a pedicure. After December 31, 2010, we will require you to pay any increase in the price of this service.”

This wording is not valid, because it does not indicate the value of the pedicure at the time the gift certificate was purchsed. Nadia can get a free pedicure.

Scenario C: The gift certificate says “Good for a pedicure (value $35). After December 31, 2010, we will require you to pay any increase in the price of this service.”

This wording is valid. Since the price of the pedicure has gone up $5 since her friend bought the gift certificate, Nadia must pay the $5.

A card might indicate a date at which you have to get it replaced. This could be the case, for example, if a company wants all the cards it has in circulation to be the new version of its cards.

In these cases, the amount still on the card when it is replaced must stay on the card.

There are also some other rules:

• Your card must be replaced for free.
  
• The replacement date must be written on the card.
  
• Right after the date, there must be a mention that you do not lose any money left on the card.

As a general rule, merchants who sell prepaid cards cannot charge a fee to buy or use them.

Exceptions:

• Fees are allowed on prepaid credit cards.
  
• Fees can be charged if you want to customize the card (the design, your name, etc.) or to replace a lost, stolen or damaged card.
  
• Cards valid at several different businesses (e.g., a shopping centre card) can have

-activation fees up to $3.50 (must be indicated on the card), or
-inactivity fees up to $2.50 a month, but only if the card includes the information shown in the shaded box below.

Also, for inactivity fees, the merchant must wait 15 months after the card is purchased to claim these fees. And if, before the end of the 14th month, you request the merchant to wait until the 18th month to collect these fees, the merchant must wait until the 18th month!

Contact the Consumer Protection Office.