With new laws on gift cards targeting expiration dates and under-the-radar fees, gift cards have a fresh new look. It’s a look that consumers should like.
Here is the scoop. Woven into the Credit Card Reform Bill, which for now, kicks in Feb. 1 (although the gift card provisions don’t trigger until August 2010), the new gift card regulations take dead aim at perceived abuses by retailers. Included in the credit card legislation are the following consumer-friendly changes:
Longer expiration dates. Gift cards cannot expire until five years after they’re issued. Up to now, short-term expiration dates on gift cards were a big money-making wrinkle for retailers – one year was a common timeframe – after which the card was canceled. Consumers will soon have a much bigger window to use their gift cards.
Tighter fee restrictions. Under the new rules, card issuers can only impose monthly fees if the gift card goes unused for longer than one year.
Greater transparency. Retailers will have to be more open about fee conditions. The new regulations mandate that fee information must be listed either on the card itself or its package.Cash back from old cards. The new rules make it easier for individual states to force companies to return money to recipients who never got around to using the gift card. Card owners may have recourse through their state’s unclaimed property agency once the card has expired.