Gift cards now a safer way to shop
In a move to protect consumers, the Federal Reserve Board implemented new rules in August to better regulate store gift cards, gift certificates and general-use prepaid cards.
Highlights include limiting inactivity or service fees, prohibiting expiration dates less than five years after issuance and requiring certain disclosures be printed on the card.
Companies have until Jan. 31, 2011, to print the disclosures on cards, but the new protections are now in effect and must be displayed in alternative ways to alert consumers, such as store websites.
The regulations do not apply to reloadable prepaid cards not marketed or labeled as a gift card or gift certificate, or prepaid cards received through a loyalty, award or promotional program.
Millions of shoppers use prepaid cards every day as a preferred payment method to reduce fraud and conveniently access funds, according to the Network Branded Prepaid Card Association, a nonprofit focused on customer satisfaction.
"We fully support the new gift card rules, which many of our members have already implemented," says NBPCA president Kirsten Trusko. "It's a win-win for consumers."