Gift Card Crackdown Just in Time for Holiday Shopping
By Gene Byrd
Nov 17, 2009
A gift card crackdown has been proposed as American retailers and shoppers gear up for the rush of Holiday shopping season. The Federal government says it wants to protect consumers. "The rules would protect consumers from certain unexpected costs and would require that gift card terms and conditions be clearly stated," the Fed said in a press release.
According to a report from the Associated press news service, "Under the proposed rule, consumers must have at least five years to use the gift cards before they expire. The Fed also said service or inactivity fees can be imposed only under certain conditions."
More detail here on the proposed changes from ABC News. “These rules are the right step, but it would be far better for them to take effect in time for this holiday shopping season,” said Sen. Charles Schumer, D-N.Y., who championed the gift-card crackdown in Congress.
The item notes that such fees can be charged if the consumer hasn't used the card for at least a year, if the consumer is given clear disclosures about them and if no more than one fee is charged a month, the Fed said. Gift cards are essentially an interest free loan to the issuer from the purchaser.
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