According to an announcement made by the Federal Reserve on Nov. 16, 2009, a proposal has been issue to add new provisions to the Credit CARD (Card Accountability Responsibility and Disclosure) Act of 2009.
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If the proposal is accepted, there will be a number of new restrictions placed on gift card fees.
The New Proposal
According to the proposal, which was directed by Congress to be issued by the Federal Reserve, some of the restrictions would apply to gift certificates, store gift cards and general-use prepaid cards. A few include:
- Prohibiting issuers from charging dormancy fees on cards unless they’ve been inactive for at least a year (after the year has passed, the issuers are limited to one fee per month).
- Preventing issuers from charging fees for monthly maintenance, balance inquiry transactions, reloading and at the point of sale.
- Stopping cards from expiring sooner than five years after the funds are loaded and issued or sold.
Public Opinion Accepted
The Fed will accept public comments for 30 days from the announcement. After that time, the Fed will be able to revise the proposed rules. It must submit finalized regulations by February 22 – they will be effective by August 22.
According to Sen. Charles Schumer (D-NY) who authorized the gift card reforms, it’s high time to make some changes. His sentiment is mirrored by the high number of consumers who don’t want to purchase gift cards to send as gifts because of the fees and expiration dates.
Are you put off by the excessive fees and expiration dates found with gift cards?