The FRB proposed rules under Regulation E that would restrict the fees and expiration dates that may apply to gift cards and require certain disclosures. The proposal would prohibit dormancy, inactivity, and service fees on gift cards unless: (1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded. The proposal generally cover retail gift cards, which can be used to buy goods or services at a single merchant or affiliated group of merchants, and network-branded gift cards, which are redeemable at any merchant that accepts the card brand. Comments on the proposal must be submitted within 30 days after publication in the Federal Register. Click here for the notice.
Alert November 17, 2009