What you need to know: Federal gift card regulations
Restaurants that sell gift certificates and gift cards need to know about rules governing expiration dates, fee restrictions, and wording on gift cards and gift certificates. The law is part of Congress’s Credit CARD Act of 2009 and took effect Aug. 22, 2010.
The consumer-protection measure:
- Limits on expiration dates. The money on your gift card will be good for at least five years from the date the card is purchased. Any money that might be added to the card at a later date must also be good for at least five years.
- Replacement cards. If your gift card has an expiration date you still may be able to use unspent money that is left on the card after the card expires. For example, the card may expire in five years but the money may not expire for seven. If your card expires and there is unspent money, you can request a replacement card at no charge. Check your card to see if expiration dates apply.
- Fees disclosed. All fees must be clearly disclosed on the gift card or its packaging.
- Limits on fees. Gift card fees typically are subtracted from the money on the card. Under the new rules, many gift card fees are limited. Generally, fees can be charged if
- you haven't used your card for at least one year, and
- you are only charged one fee per month.
- These restrictions apply to fees such as:
- dormancy or inactivity fees for not using your card,
- fees for using your card (sometimes called usage fees),
- fees for adding money to your card, and
- maintenance fees.
The law applies to gift certificates and cards, as well as general-use gift cards that can be used anywhere, such as those issued by Visa and American Express. The law does not apply to rewards cards or reloadable prepaid cards not intended for use as gift certificates.
Under the new law, gift-card and gift-certificate recipients can use card balances for at least five years from the date the card is purchased, or at least five years after any money is added to the card, whichever is longer.
The National Conference of State Legislatures web site offers more information.