New Law Delays Gift Card Disclosure Rule Implementation
The President has signed H.R. 5502 – the “Eco Gift Cards Act” – delaying the implementation of gift card disclosures required under the Credit CARD Act.
Under the Credit CARD Act, new gift card rules become effective August 22, 2010. Under the new rules, most gift cards must not expire in less than five years. If you’ve loaded more money on a gift card, you still have five years to use it, and the issuer must send you a free replacement card upon request. The rules also require new disclosures to accompany gift cards so that consumers understand their rights.
But that was the problem.
If enacted, some 100 million existing gift cards would have had to be destroyed and replaced with new cards that have the required disclosures printed on them. Representative Dan Maffei, who sponsored the legislation, noted in a press release it would have been “the equivalent of eight football fields filled 12 feet deep with plastic cards.” Along with the Network Branded Prepaid Card Association (NBPCA), an industry trade group, he also pointed out the potentially detrimental impact on the ability of manufacturers and merchants to get new compliant cards on store shelves for the upcoming holiday season.
The new gift card rules that go into effect on August 22, 2010 also protect consumers from balance-draining fees. No fee can be charged unless you haven’t used your card for a year, and even then, no more than one fee can be charged per month. But now, instead of disclosures with the cards themselves, card issuers will use in-store signs, customer service numbers, Web sites, and other forms of advertising to disclose the new protections.
This does raise an interesting question, though. How do we recycle the millions of gift cards we use each year when they have no value left?
Gerri Detweiler – Personal finance author and Credit Advisor for Credit.com, Gerri contributes budgeting, debt recovery and savings information online. She is also the co-author of Reduce Debt, Reduce Stress: Real Life Solutions for Your Credit Crisis.
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