Once again, gift cards were a big seller during the holiday season. A National Retail Foundation survey showed that well over half of adults wanted gift cards over clothing, books, entertainment and other options. The cards offered this season carry more legal protections for consumer than those offered in previous years, thanks to the Credit Card Accountability Responsibility and Disclosure or CARD Act. Most of the gift card provisions of the CARD Act became effective in August 2010, and included expiration date and replacement date requirements, as well as limits on fees such as dormancy, inactivity and service fees. (See prior blog here for all the details.) The CARD Act also requires that the expiration date and any fees that may apply to the card be actually placed on the face of the gift card, along with a toll-free telephone number people can call for more information. However, to allow gift card issuers to use up their old card stock, Congress amended the CARD Act in July to give businesses with cards produced before Apri l1, 2010 up to January 31, 2011 to replace all their card stock with cards that comply with these disclosure requirements. Those businesses selling these non-compliant cards in the interim period have been required to inform the consumer of the expiration date and applicable fees by providing notice via in-store signs, web site disclosures, general advertising, or service calls. In addition, the business is required to advise consumers that: Any gift card or gift certificate for which funds expire shall be deemed to have no expiration date with respect to the underlying funds; Consumers holding these cards have the right to a free replacement card or certificate that includes the packaging and materials that are typically associated with these cards; and Any dormancy fee, inactivity fee or service fee for such cards or certificate that might otherwise be imposed may not be charged unless they would otherwise comply with the CARD Act fee restrictions. However, as of January 31, 2011, businesses that still hold gift cards or certificates produced prior to April 2010 must replace those cards or certificates with cards that comply with the on-card disclosures required by the CARD Act. Depending on sales, these replacements may be costly. In any event, conducting a thorough inventory of gift cards being sold at your business likely should top a retailer's New Year's resolution list. – Beth DeSimone
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