Posted byon August 10, 2010
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Gift cards make wonderful gifts because they allow you to basically choose what you would like for yourself. But have you ever turned to your gift cards from last Christmas, or two birthdays ago, only to find that the dollar amount has decreased due to fees, or that it has expired all together? Some of that unclaimed money we see advertised on commercials and newspapers (which ends up being spent by your state) is actually made up of lost and expired gift card money.
Through the Credit Card Accountability, Responsibility and Disclosure Act, (effective August 22, 2010) Federal Reserve Regulations aim to close some of the loopholes that make this a $50 billion industry in favor of retailers/credit card companies and at the expense of consumers. Here’s the breakdown of the new regulations, referred to as the gift card law:
The new regulations impose restrictions on the following: gift certificates, store gift cards, and general-use prepaid cards.
Under these new regulations, gift cards cannot be issued with an expiration date of less than 5 years from the date of purchase, or the date that funds were last loaded on a store gift card or general-use prepaid card.
The target fees that restrictions are placed on are “inactivity fees,” “dormancy fees,” and “service fees,” all of which are defined under these new regulations. These fees are only allowed now if:
It appears that the new gift card laws will certainly impact visa/mastercard gift cards, as some of them begin charging a monthly “service fee” within 1-3 months of purchase. And also this should impact some retailer gift cards which have a one-year expiration date. So good news for us consumers!
Of course, if you still don’t have a use for your gift card, you can sell it on Plastic Jungle!