CARD Act of 2009

U.S. Federal Reserve rules relating to gift card and gift certificate expiration dates and fees, whether sold by a merchant, shopping center or credit-card company, took effect Sunday, Aug. 22, 2010, for all gift cards and gift certificates. These rules apply only to gift cards sold on or after Aug. 22, 2010.

Gift Cards

Handwritten and/or paper gift certificates are excluded from the rules, both for fees and expiration dates.

While many retailers already comply with these rules, because their gift cards and certificates have no expiration or fees associated with them, it is important that retailers familiarize themselves with the requirements.

Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, retailers canNOT:

  • Charge an inactivity fee until the card or certificate has not been used for a full year (12 months).
  • Set an expiration date any earlier than five years after the card or certificate is issued.
  • Charge more than one fee (of any kind) in a single month.

But retailers can:

  • Charge a one-time fee to be paid when the card or certificate is purchased.

And retailers must:

  • Print information on the card or certificate disclosing any fees and expiration date and provide a toll-free phone number or website to get more information.

The rules DO NOT cover rebate and loyalty reward cards or reloadable cards, such as prepaid phone cards or rechargeable debit cards.

Other provisions of the law and related rules:

  • Even if expiration date on the physical card or certificate has passed, customers can still request that the issuer send them a new card or certificate for the amount of any remaining funds associated with the card after it has expired. Under the rules, retailers have to do this for free or return the remaining balance.
  • Fees for late payments are capped at $25, or the amount of the violation, whichever is less.
  • If a customer repeats is late with a payment or other card violation within six months, the cap rises to $35.

>> More explanation of the gift card rules
>> Federal gift card law