Credit CARD Act Takes on Store-Bought Gift Cards

Fox Business
August 17, 2010

The final portion of financial regulations to take effect under the Credit CARD Act will do so on Aug. 22, bringing gift cards under the same rules as credit and debit accounts in order to better explain fee structures and extend expiration dates. While some gift card issuers previously set short redemption windows and adjusted expiration dates arbitrarily, the new regulations will require that gift cards remain active for at least five years and mandate that stores transfer unredeemed gift card balances to replacement cards. The new rules force issuers to disclose rules on fees in plain language at the time of purchase and forbid any monthly fees within the first year. Still, there are two loopholes: many reloadable debit cards function more like checking accounts and do not follow the same rules on fees and expiration dates as other prepaid cards, and many companies have replaced promotional rebate checks with pre-loaded debit cards that carry their own terms and conditions.
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