What you need to do to comply with the new federal gift card law
Oct 5, 2010
Background
The plastic gift card has been around since the mid-1990s with very little government regulation. Over the years many states have passed laws giving consumers various levels of protection. But until now, there has been no uniformity governing gift cards’ expiration date, fees and redemption.
How to comply with the new federal gift card law
On August 22, 2010, the federal gift card law set forth in the Credit Card Accountability, Responsibility, and Disclosure Act of 2009 went into effect.
Restaurants and other retailers selling gift certificates and gift cards need to be aware of the following consumer-protection measures that took effect on August 22, 2010:
• Gift cards may have an expiration date, but it must be at least five years from the date of purchase or last time money was added to the card.
• Dormancy, inactivity, and service fees are allowed only if the card has been inactive for more than one year. Such fees are limited to one per month and the fee must be disclosed on the card.
• The disclosure of a service fee structure on the gift card is not required until January 31, 2011 on existing cards. However, the new rules for expiration dates and fee limits on existing cards need to be disclosed through alternative sources, such as in-store signs.
The federal law does not preempt state laws that provide greater consumer protection. It should also be noted that telephone service cards, loyalty and promotional cards, reloadable cards not marked as gift cards, and paper-issued gift certificates for tickets, admission, and coupons are excluded from the law.
For help
If you have questions about the new federal law or any state laws pertaining to gift cards, please contact us via email or 410.685.5512.
