7 TIPS for … Dealing With Holiday Shopping

Holiday shopping — it’s always a challenge. But this year shoppers are facing some new realities. With the economy under siege, not only must you decide what to get your wacky relatives, the dog walker and your kids’ teachers, but you’ve got to protect yourself from holiday financial disaster.

With all the unfortunate news about bankrupt businesses and shops closing, are even gift certificates and gift cards too risky nowadays? Read this before you open your wallet!

1. I received an e-mail warning me not to buy from stores in financial trouble. What should I do?

Those e-mails are full of misleading info. But here’s the scoop: Since businesses are coming and going very quickly, pay with plastic. That’s the most reliable way to protect yourself. The federal Fair Credit Billing Act says if you buy something with a credit card and the store goes out of business, the credit card company has to take the hit and give you a refund. It also says you don’t have to pay for something you did not receive. So if your mail-ordered gift never arrives, call your credit card company and put it in dispute.

2. What if I pay with cash, a debit card or a check?

Pay that way and you may be rolling the dice. There are no protections if the store goes under before you get your furniture or flat screen delivered. Your only option may be to get in line as a creditor. If you used a debit card with a VISA or MasterCard logo to pay for a purchase you did not receive, contact the credit card company (not the bank that issued the card). They may be able to help.

3. Am I out of luck if I have a gift card and the store files bankruptcy?

It depends. If a company files Chapter 11 “reorganization,” federal law says the stores don’t have to honor gift cards, but the company may ask the court if it can. And sometimes there are court orders requiring stores to accept them. But if a company files for Chapter 7 “liquidation,” there may not be enough assets left to cover the value of the gift certificates. And that leaves you with a worthless piece of paper.

4. What if a business just closes or sells out?

If a business closes or sells out, the sellers may set up a deal so customers can transfer the gift certificate to another location or the new owner. But you know what? They don’t have to — and they probably won’t. We hear stories every day about people who bought gift cards and gift certificates and didn’t use them before the store vanished. And there’s nothing anyone can do about it.

5. How long do I have to use a gift card?

Massachusetts law says a gift card, certificate or store credit is redeemable for seven years and that the company can’t charge dormancy fees. (Remember, however, that state law does not apply to gift cards issued by a national bank. They may be redeemable for a shorter period of time and can charge fees.) But hey, if the store goes away, who cares how long the card is supposed to be good for? It’s probably going to be worthless. So don’t hoard gift cards for a rainy day. Use ‘em … or you may lose ‘em.

6. Is it safe to buy something from a store that’s liquidating?

That’s a tough one. The Massachusetts Attorney General’s Office suggests you ask the retailer what its future plans are and what its return policy is. And remember, you may get a great deal on a stereo system, but if the store disappears, your warranty may vanish, too.

7. What about a store that has an “all sales final” blowout?

The law says a store can have any return policy it wants, so if they post “all sales final,” that means all sales are final. But if a product is defective, the policy is void. In that case, you get to pick if you want to have that defective product repaired, replaced or if you just want a refund. But caution: If a store disappears, you may be stuck with that defective product.

If you have questions about retail laws or want to file a complaint, call the attorney general’s consumer hotline at (617) 727-8400. For more tips, go to www.mass.gov/ago. {EXA}

Award-winning investigative reporter Hank Phillippi Ryan is on the air at Boston’s NBC affiliate where she has broken big stories for the past 22 years. She has won 24 Emmys as well as dozens of other regional, national and international honors for her work. (http://www.hankphillippiryan.com). Mary Schwager is a journalist with more than 16 years of experience and is the investigative producer at 7 News. She’s won more than two dozen awards for investigative, consumer and feature reporting and writing, including nine Emmy Awards, seven Edward R. Murrow Awards and three Associated Press honors. She was also a state licensed detective and performed criminal investigations on behalf of the Wisconsin Public Defender’s Office. Find more of Mary’s articles at the Boston Examiner. Ryan and Schwager can be contacted at hryan@whdh.com and mschwager@whdh.com.