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New Gift Card Rules to Affect Small Businesses

By Minara El-Rahman on November 17, 2009 | Last updated on March 21, 2019

The Federal Reserve Board released a press release that announced that proposed rules to restrict fees and expiration dates would also apply to gift cards. The rules were put in place in order to protect consumers from hidden costs in gift cards. The rules also require that the terms and conditions must be stated on the gift cards.

Will These Rules Affect My Small Business?

As a small business owner, please be aware that these gift card rules may apply to you. The rules are meant to cover retail gift cards which can be used to buy good or services at a single merchant (such as yourself) or an affiliated group of merchants (like your local business association). You are also supposed to keep a close watch of any gift cards that are given out by credit card companies if you happen to accept that credit card company's cards.

So if you are planning to give out gift cards during the holiday season (and in the future) for your small business, just make sure you keep these guidelines in mind.

What Are These New Guidelines?

According to the Federal Reserve Board, these guidelines would prevent dormancy, inactivity or service fees on gift cards except: "(1) there has been at least one year of inactivity on the certificate or card; (2) no more than one such fee is charged per month; and (3) the consumer is given clear and conspicuous disclosures about the fees. Expiration dates for funds underlying gift cards must be at least five years after the date of issuance, or five years after the date when funds were last loaded."

How Can I Make Sure My Small Business Is Compliant?

Make sure you read the guidelines listed in the press release. As a small business owner, you should also be aware of the CARD Act.

There is a fact sheet available at the White House website about the Credit Card Accountability, Responsibility and Disclosure Act.

There is a section that refers to gift cards. Make sure that you read and understand the rules in place for gift cards before you issue your own gift cards. It could save you trouble down the line. It also helps protect your customers.  

If you have any more questions about gift cards in general, please visit the links in our Related Resources section.

Related Resources:

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