New Federal Legislation – What Does It Mean For You?
The gift card industry is all abuzz about the final set of gift cards regulations that went into effect over this past weekend. Most of the regulations deal with use-anywhere “open loop” gift cards, such as Visa, Mastercard and American Express gift cards. As I’ve written here before, Plastic Jungle generally does not transact in those cards so the regulations don’t affect us much – or you when you do business with us.
But some of the regulations do change the rules that apply to retail and merchant branded “closed loop” gift cards, such as the gift cards we buy and sell, for instance Target, Home Depot and Best Buy gift cards. The new regulations limit non-use fees, allowing them only if the card has been inactive for a year or more, and also ensure that a gift card may not expire prior to 5 years after it was sold. Gift card merchants will also be required to provide even more disclosure to you as a consumer, so more tiny print to wade through (if you should so choose)!
What’s it mean for you? Not much. Most retailers and merchants (and virtually all national retailers and merchants) eliminated non-use fees some time ago, and most stores also don’t ever expire a card. Indeed the Retail Gift Card Association requires its members, which includes most major gift card issuers, not to charge “dormancy or other administrative fees on any closed loop gift cards and to eliminate any expiration dates or conditions on such gift cards.“ Pretty strong stuff.
The truth is that these merchants want to make sure that their gift card programs are as friendly to you as possible. Some cards, mostly local and smaller merchant cards who may not even be aware that their cards have these fees, may charge fees, and it’s always a good idea to check the terms of any gift card – but these regulations will ensure that you have the time to do so before you are penalized.
It also means that we want your gift cards even more. From our perspective, limiting non-use fees and expiration policies means the cards will have longer lives, and so we can buy and sell more of them. It’s nice that the government understands that gift cards are a really valuable asset to you the consumer. We and our friends in Washington have your interests at heart – we both want to make sure your gift cards are as valuable to you as possible.