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."


I recently got married and we received gift cards from many out of town relatives. We were in the process of moving, so we didn't use them right away. By the time we decided what we wanted to buy, we discovered that all the VISA "gift" cards must have been classified as prepaid debit cards and the balances began declining by $2.50-$5.00/month on each card after only a few months, which added up to a lot of lost cash. On top of that, the gift givers had had to pay an "activation fee" when they bought them - they would have been better off writing us a check!

I received my retirement gift from the office in the form of 3 gift cards purchased at a Supermarket. Two of the three were not properly scanned and the purchaser had to return to the store to activate them properly. Several people commented that this is a common problem regardless of where they are purchased. Prior to this, I had only received about four gift cards for smaller amounts and they worked fine.

I attempted to use a $100 AMEX gift card at Walmart only to find out that they would not honor this specific gift card. The manager would not disclose as to why but informed me that they were given strict directions from their corporate office not to honor this specific gift card.

Might as well just give cash/check as a gift card. It won't come with fees. Less likely to lose. I HATE gift cards with a passion, never have and never will give one. And yeah, there's all those pesky fees that just have to be disclosed...think the average teenager is gonna read that small print? That's who usually gets the card. Either give cash or spend the time to pick a gift that actually shows some thought and care about the person's likes/dislikes went into it. It does count.

Beware of companies in trouble. I lost about $1000 in gift cards to Sharper Image a few years ago. Meant as non specific gifts whenever I needed one but never could use them due to their bankruptcy.

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