The rise in popularity of the gift card over the last decade has meant big business for some companies. Even with the struggling economy, gift card sales totaled $87 billion in 2009, according to Tower Group Projects, a research and financial advisory firm. They come in all shapes and sizes and can be purchased at nearly any retail store. In fact, gift cards have been the most popular holiday present for the last five years. Given their common usage, whether your business sells gift cards or certificates to customers, or purchases them to give to clients or employees during the holiday season, you should be aware of new U.S. federal regulations that could impact you.
New Federal Regulations
In August, new federal rules went into effect in the U.S. to regulate gift card fees and expiration dates. As part of the Credit Card Accountability Responsibility and Disclosure Act passed by congress in 2009, the new gift card law includes:
- Gift cards must be active for a minimum of five years after the date of purchase.
- All fees, including usage, maintenance, and inactivity fees must be minor, and no more than one fee can be charged to the cardholder in a single month.
- All fees and any expiration date must be disclosed on the gift card or certificate, along with a toll-free phone number or website address for more information.
Selling Gift Cards or Certificates
If you offer gift cards or certificates for purchase to your customers, make sure you’re up to speed and in compliance with the new federal regulations. For more information about new gift card rules, visit the Federal Reserve website.
Buying Gift Cards or Certificates
As a consumer, if you’re thinking about purchasing gift cards to give to your employees or clients as an incentive, reward, or Christmas present, keep in mind that there still could be a one-time transaction fee when you purchase a gift card. Since the one-time fee charged by the card issuer vary from company to company including stores, banks, and major credit card companies, be sure to shop around to get the best deal possible to help save you money.