Gift Cards and Credit Card Reform

While much has been made of how the Credit Card Accountability Responsibility and Disclosure Act of 2009 will affect banks, consumers, people in debt, and the economy, one item that has been little noticed is how changes the rules for store gift cards.

If you have old gift cards and gift certificates floating around your wallet that expired two years ago, then this might be the new rule for you. The Federal Reserve is considering an interpretation of the law that would place new rules on these items.

The most obvious rule would set restrictions on a store from setting an expiration date of less than five years. This applies to the money on the card but not the card itself. 

It also puts restrictions on the dormancy provision or service fees on the use of a gift card. A dormancy period could not be imposed until the one year mark. Service fees, as well as other fees, could be charged only once per month, and only with clear disclosure.

The proposal would apply to gift certificates, store gift cards, and general use
prepaid cards. It would not apply to pre-pay cards.