supported by major credit card companies.
According to the Federal Reserve website, the new law will be as follows:
- Expiration Dates: Retailers will now have to allow gift cards to be active for a minimum of five years from the date the card was purchased. On the flip side of that, if you decide to add money to your card, that money will also be good for another 5 years.
- Substitution Cards: Even with the new expiration date status, your money could be good for seven years, despite the card being good for 5 years. In this case you should request a replacement card-which will be at no charge to you.
- Fees: If there are any fees associated with the gift card it must be clearly displayed on the card or packaging.Exceptions on Fees: The Federal Reserve is also mandating that all fees associated with gift cards must be minor. These exceptions are if, "you haven't use your card for at least one year, and you are only charged one fee per month." Other restrictions include:
- dormancy or inactivity fees for not using your card
- fees for using your card (sometimes called usage fees)
- fees for adding money to your card
- maintenance fees
These new regulations could help consumers start spending again. After the new Credit Card Act was passed and put into motion, many people realized how bad their spending had gotten. Knowing they can invest in a gift card, and having 5 years to spend the money, could be appealing to some.
Times are defiantly getting interesting for retailers. With new laws to take note of, and new technology like mobile credit card processing, it seems retailers will need to stay on their toes to keep up.
Shannon Suetos is a writer based in San Diego, California She writes extensively for an online resource that provides expert advice on purchasing and outsourcing decisions for small business owners and entrepreneurs such as credit card processing companies VoIP service at Resource Nation.