As part of the Credit Card Accountability Disclosure and Liability Act of 2009, Congress took aim at many of the practices surrounding gift cards purchased by consumers. If your business issues gift certificates or gift cards, you’ll want to know the rules that apply August 22, 2010.
Some of the changes include limiting service fees for inactive or inactive cards. In the past, consumers might have gotten a card as a gift or kept it and forgot about it. The card issuer will charge the card so that over time, the balance will decrease, eventually going to zero. Under the new gift card rules, they will only be allowed to charge this fee if there is no activity on the card in the one year period prior to charging. Business or card issuers are also limited to being able to charge one fee per calendar month. In addition, they must clearly and prominently disclose any fees on the gift certificate or gift card and such disclosure must be provided to the purchaser prior to purchasing the gift card.
Restrictions will also apply to the expiration date of gift cards and gift certificates. The money on a gift card or certificate cannot expire for a period of five years from the date of issue (or the last load of funds for the gift card). As is the case with fees, and expiration must be clearly disclosed on the gift certificate or gift card and disclosed prior to card purchase.
If your business occasionally issues “promotional” gift certificates that are basically coupons, you can also follow some of these rules. To avoid consumer confusion, the new rules require that if you issue a loyalty, award or promotion gift card or gift certificate, you must clearly start from the front that the card was issued for that purpose. For example, if you own a restaurant and you submit 5,000 promotional “gift certificates” for $5 each in the local paper, you will be prompted to start on the gift certificate intended for promotional purposes and the gift certificate expiration date. , If there is. If a “gift certificate” is issued for promotional purposes, the 5 year expiration date rule does not apply.
If your small business uses gift certificates or gift cards, it’s a good idea to make sure you understand these rules and that you have the right policies and procedures in place to ensure that you follow the new rules. With the sheer amount of regulation that plagues small businesses on an almost daily basis, it’s important to ensure that you receive proper business, financial, and legal guidance from your accountants and attorneys on these matters.
