Sandra Block of USA Today reports that gift cards, once loaded with expiration dates and inactivity fees, will now be more consumer-friendly thanks to The Credit Card Accountability, Responsibility and Disclosure Act that was enacted last year. The new law bars card expiration in less than five years from issue date and prohibits issuers from charging an inactivity fee unless the card has been dormant for at least twelve months. Charging a fee to replace a lost card is also prohibited.
There are still, however, some drawbacks to consider before you buy:
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Purchase fees – You’ll probably have to pay more than the face value of the gift card. The fees pay for such services as the ability to check balances online.
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Penalties – Inactivity fees applied after twelve months of non-use will typically be subtracted from the value of the card.
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Confusing disclosures – The gift card you receive may have outdated information on the back of it, as it would have been difficult for card manufactures to fill replacement orders for retailers in time for the holidays.
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Exclusions – Rebate, loyalty, promotional cards, and paper gift cards are excluded from the CARD Act restrictions on expiration dates and fees. Use them as soon as possible to avoid problems later.
CCS is here to help you with any questions you may have about using gift cards in your business. CounterPoint can bypass these issues and make gift cards a great added revenue source. For more information, call us at 425-672-4806 or email us.