New Gift Card Regulations On The Horizon in 2011

Explore: Personal Finance Blog

Don’t you hate it when you finally get around to using that gift card that’s been lying around for a while only to find that the value has dramatically decreased – or it’s expired? Thanks to new federal laws, you won’t have to worry about that so much anymore.

When the law takes effect January 31, 2011 (nope – won’t apply to all those gift cards you get/give this holiday season….) you’ll have up to a year to not use the card. After that point, the vendor can start charging inactivity fees. Those fees are expected to be pretty high – and frequent – with no cap. But most people who don’t use their card within a year either lost it or don’t care.

Before you get too excited, you should know that these new rules don’t apply to “prepaid”/reloadable cards that are issued by credit card companies. So if you see a MasterCard, Visa, etc… logo on the card, read the small print carefully since they have their own policies. These also won’t apply to government issued cards (food stamps, for example) or rebate cards. What are rebate cards, you ask? Instead of receiving the typical rebate check for an offer, many companies are sending customers one of those prepaid credit cards. Use those as soon as possible.

You may have also noticed that some vendors won’t credit your credit card anymore for refund/returned merchandise. Instead, you’ll get a gift card with the amount of the refund/return credited to. In the past, only cash users got these cards in lieu of cash back for a return. Now, they want to lock you in to re-using the money in their establishment – not somewhere else. We’ll assume that these “refund” cards will be considered gift cards so you’ll have a year to use them without penalties. But watch out for new types of “refund” cards to appear which won’t have to follow the new rules.

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