New Gift Card Rules — December 2010, reviewed January 2013

It is the season for giving!  For many givers and receivers a popular gift option is gift cards.  One of the problems with them in the past though has been unexpected declines in card value if not used within a certain time period and fees for usage.

New Federal Reserve rules provide protections when you purchase or use gift cards.  Here are some key changes that have been effect on cards sold since 2010.  The rules cover both store gift cards and gift cards with a MasterCard, Visa, American Express or Discover brand logo.

There are four main protections:

First, money on a gift card will be good for at least five years from date of card purchase.  If money is added at a later date, that too must be good for at least five years.
If your gift card has an expiration date you still may be able to use unspent money that is left on the card.  You can request a replacement card at no charge if the card expires and there is unspent money.  The consumer needs to check the card to see if expiration dates apply.

The third protection is that fees are disclosed.  All fees must be clearly disclosed on the gift card or its packaging.

The fourth protection limits fees.  Gift card fees typically are subtracted from the money on the card.  Under the new rules, many gift card fees are limited.  They can be charged if the card isn’t used for at least one year, but you only can be charged one fee per month.

More information on Gift Card Rules is available from the Federal Reserve Consumer Information site at www.federalreserve.gov.  Know the rules of gift cards and enjoy their use.