The Federal Reserve’s Gift Card regulations (promulgated pursuant to the CARD Act) were originally intended to go into effect on August 22, 2010. This week, Congress gave gift card issuers a slight reprieve.
On July 13, 2010, the Senate passed HR 5502, postponing the effective date of certain gift card provisions from August 22, 2010 to Jan. 31, 2011. The Bill, referred to as the “ECO-Gift CARD Act”, will avoid the unnecessary destruction of millions of pieces of plastic that would otherwise have been required by the Federal Reserve regulations.
The Bill provides additional time for gift card issuers and retailers to sell or dispose of existing gift cards (or cards manufactured prior to April 2010) which did not meet the marking or disclosure requirements of the new gift card regulations.
Gift card retailers and issuers may, instead, comply with the regulations by “providing notice to consumers, via in-store signage, messages during customer service calls, Web sites, and general advertising, that-
(A) any such certificate or card for which funds expire shall be deemed to have no expiration date with respect to the underlying funds;
(B) consumers holding such certificate or card shall have a right to a free replacement certificate or card that includes the packaging and materials, typically associated with such a certificate or card; and
(C) any dormancy fee, inactivity fee, or service fee for such certificates or cards that might otherwise be charged shall not be charged if such fees do not comply with section 915 of the Electronic Funds Transfer Act.
After January 31, 2011, the full notice and marking requirements of the gift card regulations will apply to all cards.