New Gift Card Rules Will Make That Plastic Even More Of A Hot Potato
Written by Evan SchumanAugust 25th, 2010
When the U.S. Federal Reserve's new gift card rules took effect on Sunday (Aug. 22), it made severe changes to when gift cards can expire and even more severe changes to when the money on those cards can expire. These changes could prove problematic for retailers who have stockpiles of cards with the old wording. But those headaches are trivial compared to what their IT counterparts, who need to incorporate the new accounting rules for existing and new gift card accounts, will face.
The new rules apply to activity as of Sunday, which means that the millions of cards already in circulation must be handled differently until they're all gone.
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2 Comments | Read New Gift Card Rules Will Make That Plastic Even More Of A Hot Potato
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Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk.com? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.
Our Comment SPAM system is getting very aggressive these days and has been blocking legitimate comments. If you post a comment and don't see it appear within 2 hours or so, can you please send a heads-up to customer-service@storefrontbacktalk.com? Ideally, please include the time you posted the comment. That will allow us to try and hunt for it. Thanks! P.S. We're working on fixing the system, but we don't want to lose any valuable comments in the meantime.
-Christine
August 27th, 2010 at 11:34 am
Don’t destroy your non-compliant gift cards just yet! Congress and the President have passed H.R. 5502, the ECO-Gift CARD Act. The Act postpones the effective date of certain gift card provisions from August 22, 2010 to January 31, 2011. The bill provides additional time for gift card issuers and retailers to sell or dispose of existing gift cards produced prior to April 1, 2010 which do not meet the marking or disclosure of the new gift card regulations.
To be eligible for the extension, companies must agree to eliminate the cards’ expiration date and consumers would be entitled to receive a free replacement card or certificate when there are funds remaining.
During the transition period and beyond, card issuers must notify consumers of their rights through in-store signage, messages during customer service calls, Web sites, and general advertising, that -
Any such certificate or card for which funds expire shall be deemed to have no expiration date with respect to the underlying funds;
Consumers holding such certificate or card shall have a right to a free replacement certificate or card that includes the packaging and materials, typically associated with such a certificate or card; and
Any dormancy fee, inactivity fee, or service fee for such certificates or cards that might otherwise be charged shall not be charged if such fees do not comply with section 915 of the Electronic Funds Transfer Act.
The ECO-Gift CARD Act makes no change to the CARD Act rules, it simply keeps gift cards on the shelves for consumers this holiday season by not requiring the destruction and replacement of existing gift card inventory.
Cards produced after April 1, 2010 must comply with The CARD Act.
August 27th, 2010 at 2:43 pm
Great info Angela! Few of the published reports mention the ECO-Gift CARD Act and a lot of merchants are confused about the deadlines and the eligibility requirements. The good news is that the ECO-Gift CARD Act is only 2 pages long and fairly easy to understand for us regular, non-lawyer types. Anyone can download it by doing a search for HR5502 at the Congress.gov web site.