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Tips From a Consumer Group: One Thing to Know Before Buying Gift Cards This Holiday Season

Dec. 15, 2017


Tips From a Consumer Group: One Thing to Know Before Buying Gift Cards This Holiday Season

Did you know that some companies include forced arbitration provisions in the fine print of their gift card contracts? These anti-consumer provisions take away a recipient’s right to hold retailers accountable in court for wrongdoing.

Forced arbitration provisions require consumers to take their disputes to corporate-friendly arbitrators rather than to a neutral court. Studies show that consumers lose nine out of 10 times in arbitration. Worst still, some arbitration provisions require a gift card recipient to jump through extraordinary hoops just to have their dispute heard. For example, the ride sharing service Lyft’s gift card contract says you must arbitrate your dispute in California no matter where you live.

Gift cards are the most popular item on wish lists in 2017 for the 11th year in a row, according to a poll by the National Retail Federation. Yet many people have no idea that their favorite gift cards include forced arbitration provisions, which are now ubiquitous in many contracts – from student loans to workplace agreements.

If you are planning to get a gift card for a friend or loved one this holiday season, here are some ways to protect them:

• Search for “arbitration” in the terms and conditions section of the company’s website. If they include a forced arbitration provision, consider purchasing a gift card from a different retailer.
• If the terms and conditions allow recipients to reject arbitration provisions within a certain number of days after getting the card, let the recipients know they have a window of time before they waive their rights.
• Give them cash instead.

Some of the big companies that include forced arbitration clauses in their gift cards include Amazon, Lyft and Discover. Join Remington A. Gregg, Public Citizen’s counsel for civil justice and consumer rights, for a short Facebook Live segment at 2 p.m. EST on Monday, Dec. 18. He will explain how consumers can protect themselves from insidious arbitration clauses in gift card contracts.