This year we will see a lot of changes in the banking industry. We have seen the CARD act that became effective February 22, 2010. A new regulation for debit cards becomes effective July 1, 2010. Now as part of the CARD Act a new regulation by the Federal Reserve will begin on August 22, 2010 that affects gift cards sold on or after August 22, 2010.
The new regulation applies to gift cards, non-reloadable or promotional program prepaid gift cards and gift certificates. The new regulation puts restrictions on inactivity or service fees which caused many consumers to lose the value on gifts cards or gift certificate due to the outrageous inactivity or service fees charged.
Here are some of the major features of the new gift card regulation:
1. Inactivity or service fees will only be allowed for a gift certificate or gift card that has been inactive for at least one year.
2. Only one fee can be charged per month and the consumer is provided clear disclosures about the fees.
3. Additional fees that are restricted by the regulation include ATM fees, service fees, monthly maintenance fees, balance inquiry fees and transaction based fees.
4. Gift certificate, gifts cards or non-reloadable or promotional program prepaid cards can no longer be sold if the expiration date is less than 5 years from the date of issue or the date the funds are last loaded on the card.
5. Fees will no longer be charged for replacing an expired gift card or gift certificate or for refunding the remaining balance if funds are still available.
Although consumers will no longer be charged these fees you better believe that the banking industry will find other ways to earn the revenue they are losing with all the new regulations so make sure you read my blog for additional updates throughout the year.
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