Credit Card Act Gift Card Protections Make Gift Cards LESS of a Rip Off
Perhaps the least publicized portion of the credit card act that passed last year is the section that addresses unfair gift card practices. The new gift card protections won’t take effect until August 22, 2010. Here’s a preview of what will be changing.
Not Just for Gift Cards
The new protections not only will cover gift cards, but also prepaid cards and gift certificates. Promotional, loyalty, and re-loadable cards (prepaid Visa and MasterCard, for instance) are exempt from the new restrictions.
What are the New Gift Card Rules?
- Gift cards cannot expire within five years from the date they were activated, unless the expiration date is clearly disclosed at the time of purchase.
- If the gift card expires after 5 years, that also must be clearly disclosed to the buyer.
- No inactivity fees on gift cards except in certain circumstances, such as if there has been no transaction for at least 12 months.
- If there are inactivity and dormancy fees, they must be clearly disclosed at the time of purchase.
What’s Not Covered?
Outside of the previously mentioned time limits, all existing fees are fair game, including those pesky purchasing fees (you know, when you spend $105 for a $100 gift card).
The bottom line is that gift cards are not a good deal, they never have been, and they probably never will be. Plus, trust me, the recipient would much rather have the cash. The Card Act gift card protections won’t prevent that.
Gift Card Discussion
- Do the new rules make a gift card purchase more appealing to you?
- Under what circumstances have you purchased gift cards in the past?
- Have you ever been given a gift card that has expired? Were you ticked off?