The Card Act has been a game-changer for the gift card industry, providing consumers with greater protection and transparency. Understanding the ins and outs of gift cards has become more important than ever, with new regulations and rules that affect both consumers and retailers. In this article, we will explore the key aspects of the Card Act and provide you with a comprehensive guide to gift cards.
What is the Card Act and how does it affect gift cards?
– The Card Act is a federal law that regulates the use of gift cards and protects consumers from certain unfair practices.
What are the key provisions of the Card Act related to gift cards?
– The Card Act requires gift cards to have a minimum expiration date of five years and prohibits inactivity fees within the first year of purchase.
Can gift card issuers charge fees or deduct amounts from the balance?
– Under the Card Act, gift card issuers cannot charge fees or deduct amounts from the balance unless the card has been inactive for at least 12 months.
What happens to unused gift card balances?
– The Card Act requires gift card issuers to allow consumers to redeem the full balance of the card, even if it is less than $5.
Are there any exceptions to the Card Act rules for gift cards?
– Yes, there are some exceptions, such as reloadable cards, promotional cards, and loyalty or reward program cards.
After understanding the ins and outs of the Card Act, users can feel more confident and informed when purchasing and using gift cards. They can avoid hidden fees and expiration dates, and also have more protections against lost or stolen cards. Overall, the Card Act helps to ensure that gift cards are a convenient and fair way to give and receive gifts.
Skip navigation. Retail gift cards have become an increasingly popular way for consumers to buy things. However, in light of the economic downturn, many consumers have been asking what they should do to protect themselves if they have purchased gift cards from a retailer, and that retailer later files for bankruptcy or goes out of businesses. New federal rules went into effect in that are designed to protect consumers by restricting gift card fees and gift card expiration dates. These rules apply to two types of cards Retail gift cards, which can only be redeemed at the retailers and restaurants that sell them and bank gift cards, which carry the logo of a payment card network like American Express or Visa and can be used wherever the brand is accepted. The FTC has brought enforcement actions against several companies for deceptive marketing of gift cards. It also has information available for consumers about shopping for and using gift cards. You are here. View More Press Releases. I Would Like To Stay Connected with the FTC.
For purposes of this section, except as excluded under paragraph b , the following definitions apply. A A statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes, which must be included on the front of the card, code, or other device. B The expiration date for the underlying funds, which must be included on the front of the card, code, or other device. C The amount of any fees that may be imposed in connection with the card, code, or other device, and the conditions under which they may be imposed, which must be provided on or with the card, code, or other device and. D A toll-free telephone number and, if one is maintained, a Web site, that a consumer may use to obtain fee information, which must be included on the card, code, or other device. A periodic fee includes any fee that may be imposed on a gift certificate, store gift card, or general-use prepaid card from time to time for holding or using the certificate or card. Disclosures made under this section must be clear and conspicuous. The disclosures may contain commonly accepted or readily understandable abbreviations or symbols. Disclosures made under this section generally must be provided to the consumer in written or electronic form. Except for the disclosures in paragraphs c 3 and h 2 , written and electronic disclosures made under this section must be in a retainable form. Only disclosures provided under paragraphs c 3 and h 2 of this section may be given orally. Before a gift certificate, store gift card, or general-use prepaid card is purchased, a person that issues or sells such certificate or card must disclose to the consumer the information required by paragraphs d 2 , e 3 , and f 1 of this section. The fees and terms and conditions of expiration that are required to be disclosed prior to purchase may not be changed after purchase. Disclosures required by paragraphs a 4 iii , d 2 , e 3 , and f 2 of this section must be made on the certificate or card, or in the case of a loyalty, award, or promotional gift card, on the card, code, or other device. A disclosure made in an accompanying terms and conditions document, on packaging surrounding a certificate or card, or on a sticker or other label affixed to the certificate or card does not constitute a disclosure on the certificate or card. For an electronic certificate or card, disclosures must be provided electronically on the certificate or card provided to the consumer. An issuer that provides a code or confirmation to a consumer orally must provide to the consumer a written or electronic copy of the code or confirmation promptly, and the applicable disclosures must be provided on the written copy of the code or confirmation. No person may impose a dormancy, inactivity, or service fee with respect to a gift certificate, store gift card, or general-use prepaid card, unless. No person may sell or issue a gift certificate, store gift card, or general-use prepaid card with an expiration date , unless. A The certificate or card expires, but the underlying funds either do not expire or expire later than the certificate or card, and. B The consumer may contact the issuer for a replacement card and. The following disclosures must be provided in connection with a gift certificate, store gift card, or general-use prepaid card, as applicable. For each type of fee that may be imposed in connection with the certificate or card other than a dormancy, inactivity, or service fee subject to the disclosure requirements under paragraph d 2 of this section , the following information must be provided on or with the certificate or card. A toll-free telephone number and, if one is maintained, a Web site, that a consumer may use to obtain information about fees described in paragraphs d 2 and f 1 of this section must be disclosed on the certificate or card.