New rules for gift cards go into effect Aug. 22, 2010.
New rules involving the sale of pre-paid gift cards and incentive offers, including limitations on expiration dates and dormancy fees, went into effect Sunday as a result of federal legislation adopted earlier this year.
The legislation, which affects gift cards sold or issued on or after Aug. 22, is designed to address concerns raised in recent years by consumers, who are increasingly buying gift cards.
Under the new rules, gift cards must be good for at least five years from the purchase date. Any money later added to the card must also be good for at least five years, said David Koenig, director of tax and profitability for the National Restaurant Association…
In addition, consumers may be able to use the unspent money on a card even after it expires. If the card expires in five years, for example, but the money left on the card doesn’t expire for seven years, consumers can request a replacement card at no cost.
The new rules also place limits on fees for dormancy or inactivity, as well as usage or maintenance fees. Generally, fees can be charged if the card has been inactive for at least 12 months, for example, but a fee can be charged only once per month after that. Restaurants are allowed to charge fees for replacing a lost or stolen card.