New gift card regulations (H.R. 5502) go into effect August 22, 2010 as a result of the Credit Card Act. The new rules states most gift cards must not expire less than five years of adding funds to them. In other words, if you load money on a gift card it will not be allowed to expire before five years, according to the new regulations. Currently, when you purchase a gift card it often has an expiration date of one year. If you don’t use the card within one year it expires and you lose out on using the card. To take it a step further, under the new rules if you misplace the card and it has not reached the five year expiration, the issuer has to send you a replacement card.
The new rules that go into effect on August 22, 2010 also offer protection to consumer against balance draining fees. The new rules state consumers can’t be charged fees unless the card hasn’t been used in one year. Also, the rules only allow for no more than one fee a month to be charged for the card. Once this act is in place it is estimated that some 100 million gift cards are going to have to be reissued to consumers who have purchased them prior to the new rules. This brings forth an interesting questions – What is going to happen to the millions of gift cards that can’t be used? Are they going to be recycled? Representative Dan Maffei, who sponsored the legislation, noted in a press release it would be “the equivalent of eight football fields filled 12 feet deep with plastic cards.” That’s a lot of plastic and as a result some are appropriately titling the new rules the “Eco Gift Card Act.”
The Official Summary
6/15/2010–Passed Senate without amendment. (This measure has not been amended since it was introduced. The summary of that version is repeated here.) Amends the Credit Card Accountability Responsibility and Disclosure Act of 2009 to state that, in the case of a gift certificate, store gift card, or general-use prepaid card produced before April 1, 2010, the effective date of certain disclosure requirements under the Electronic Funds Transfer Act pertaining to fees shall be delayed until January 31, 2011. Requires the issuer of such a certificate or card, as a condition of such delayed effective date, to:
(1) comply with a specified prohibition against and certain requirements for the imposition of any dormancy, inactivity, or service fees;
(2) consider any such certificate or card for which funds expire to have no expiration date with respect to the underlying funds;
(3) replace, at consumer request, any such certificate or card that has funds remaining at no cost to the consumer; and
(4) comply with certain consumer rights disclosure requirements.
Source: http://www.opencongress.org/bill/111-h5502/show
We manufacture paper cards with magnetic stripes for the gift card and hotel key card market. Does this legislation require recyclable or paper material to replace PVC.
Thanks,
Jay