Goldhawk Fights Back: Remembering the Rules for Gift Cards

This is a weekly column by Dale Goldhawk, Canada’s best-known consumer advocate. A journalist, author and broadcaster, Dale hosts Goldhawk Fights Back For You, on AM 740 or at AM740 ZoomerRadio, Monday through Friday from 11 am to 1 pm, in the eastern time zone. Visit his website at

Picking the right gift can be tough. What about Uncle Bob? He has everything already. Or how about Cousin Ted? He doesn’t like anything. What happens if you get the wrong size? The wrong colour? The wrong gift entirely?

How many times can you buy the wonderful gift of socks?

Enter the gift card. You can buy one for many individual stores or chains. Or you can go to a mall and buy a gift card good for a whole assortment of participating stores.

When you buy the card, you should never pay tax on the face amount. A $50 gift card should cost you $50. Any tax payable would be payable when the happy gift recipient buys something. The tax along with the purchase price of the gift is deducted from the card value.

In Ontario and some other provinces, there is no expiry date on a gift card if you buy the gift card from a specific store or chain.

In Ontario, if you buy a mall gift card, good for any participating store in the mall, the rules are more complicated. The mall is able to charge you a one-time activation fee of $1.50. Then, if you haven’t used it all by 18 months, a dormancy fee of $2.50 per month can be charged, whittling your card down to nothing if you keep it around that long.

Generally speaking, the No Expiry rule does not apply to cards for only one purpose or service, such as gift cards for a manicure or a visit to a spa. Also, the law does not apply to any gift cards given away for promotional purposes.

Visa and MasterCard are also in the gift card business. You can buy them at a post office outlet and at and at several retail chain stores.

But these cards have activation fees, monthly fees after a few months and expiry dates.

So what happened to all those provincial rules about cards not expiring? They don’t apply to banks because banks are regulated by the federal government and the feds have no appropriate legislation.

By the way, don’t forget that other gift coupon — no activation fee, no monthly fee, no nothing, just value. And it comes in a variety of colours—blue, purple, green, red and beige. It’s cash, of course—offering the ultimate flexibility.

And one last by the way: If you did buy a real gift for somebody, make sure you get a gift receipt for returns — a receipt without the purchase price on it, so the giftee won’t know how much or how little you paid.

Find out about the return or exchange policy at the store as well. Some stores designate days you can or cannot return gifts. And find out if you can get a refund for the gift or only get a credit. Stores get to make up their own rules about returns so know beforehand what you will face if the gift is not the perfect gift you had hoped it would be.

Photo © parasoley

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Dale GoldhawkGemini award nominee, journalist and broadcaster, Dale Goldhawk has earned Canada’s trust by his four decades of work exposing fraud and greed in the marketplace. To read more of his articles, go to (now part of the ZoomerMedia family of websites).

Don’t miss Goldhawk Fights Back , on the New AM740 Monday to Friday from 10 a.m. until 1 p.m.