Laws That Protect Gift Cards

Buying gift cards is one of the best ways to celebrate the holiday season. However, not all gift cards are created equal. There are several laws that are in place to protect consumers.

First, there is federal law that restricts the expiration date of gift cards. It also prohibits fees on stored-value cards. There is no dormancy fee for gift cards within 24 months of their most recent activity.

The CARD Act (Credit Card Accountability, Responsibility, and Disclosure Act) was passed by Congress in 2009. It sets consumer protections for gift cards. In particular, it prohibits gift cards from expiring in five years. The act also restricts fees and transaction costs.

Gift certificates, which are also known as gift cards, are prefunded records that prove an agreement to provide goods or services. They may include a magnetic stripe, microprocessor chip, or other data storage medium. They are issued on a prepaid basis, and may be redeemed at merchants.

If the balance on a card is less than $10, the card must be redeemed for cash at the time of purchase. Depending on the law in your state, you may be required to return the card if you decide not to use it. In some cases, the issuer may charge a fee for replacing the card.

In addition to these laws, a number of states have a law that regulates the sale of gift cards. In California, for example, gift cards cannot be sold with an expiration date. Those that do violate the law are subject to a $100 fine for the first offense and a $250 fine for a second offense.