The new gift card regulations, which take effect on August 22, 2010, are intended to ensure that consumers who give or receive gift cards are not surprised by expired cards and are protected from certain fees that reduce their face value.
The new rules apply to gift cards issued by individual stores and to gift cards issued under the MasterCard, Visa, American Express, or Discover brand logos. The rules do not apply to other types of prepaid cards such as reloadable prepaid cards that are not intended for gift-giving purposes or cards given as a reward or as part of a promotion.
Under the new rules, the amount of money shown on a gift card must be honored for at least five years from the date the card is purchased. In addition, any money that might be added to the card at a later date must also be good for at least five years. The regulations also ensure consumers' right to replacement cards, require full disclosure of all fees related gift cards and place limits on those fees.
"Gift cards have become a common and convenient gift alternative," stated the FRB in a press release. "The Board's new rules help ensure that consumers who give or receive gift cards are not surprised by expired cards and are protected from certain fees that reduce their value."