| As part of the Credit Card Accountability | | | | gift card and disclosed prior to the purchase of |
| Responsibility and Disclosure Act of 2009, | | | | the card. |
| Congress took aim at many of the practices | | | | If your business sometimes issues "promotional" |
| surrounding gift cards purchased by consumers. If | | | | gift certificates that are essentially coupons, you |
| your business issues gift certificates or gift cards, | | | | could fall under some of these rules as well. In |
| you will want to be familiar with the rules which | | | | order to avoid consumer confusion, the new rules |
| took effect August 22, 2010. | | | | require that if you issues a loyalty, award or |
| Some of the changes include restrictions on | | | | promotional gift card or gift certificate that you |
| service fees for inactive or dormant cards. In the | | | | must clearly start on the front that it is issued for |
| past, consumers might get a card as a gift or put | | | | that purpose. For instance, if you have a |
| it away and forget about it. The card issuers | | | | restaurant and you sent out 5,000 promotional |
| would charge fees onto the card so that over | | | | "gift certificates" for $5 each in the local paper, |
| time, the balance would dwindle down, eventually | | | | you would be required to start on the gift |
| to zero. Under the new gift card rules, they will | | | | certificate that it was for promotional purposes |
| only be allowed to charge these fees if there has | | | | and the expiration date of the gift certificate, if |
| been no activity on the card within the one year | | | | any. If a "gift certificate" is issue for promotional |
| period prior to the charging of the fee. The | | | | purposes the 5-year expiration date rule does not |
| business or card issuer is also restricted to being | | | | apply. |
| able to charge one fee per calendar month. In | | | | If your small business uses gift certificates or gift |
| addition, they must disclose any fees clearly and | | | | cards, it is a good idea to make sure that you |
| conspicuously on the gift certificate or gift card | | | | understand these rules and that you have the |
| and the disclosures must be provided to the | | | | proper policies and procedures in place to make |
| purchaser before the purchase of the gift card. | | | | sure that you are following the new rules. With |
| Restrictions will also be placed on the expiration | | | | the overwhelming amount of regulation that is |
| dates of gift cards and gift certificates. The | | | | hitting small businesses on an almost daily basis, it |
| money on a gift card or certificate can not expire | | | | is important to make sure that you are receiving |
| for a period of five years from the date of | | | | the proper business, financial and legal guidance |
| issuance (or the last load of funds for gift cards). | | | | from your accountant and attorney on these |
| As was the case related to fees, and expiration | | | | issues. |
| must be clearly disclosed on the gift certificate or | | | | |