The credit card regulations passed in 2009 are being gradually phased in over time. On August 22, new regulations kick in that affect gift cards to stores such as Old Navy, Target and Best Buy.
Gift cards will now be required to maintain their balances for five years. This is in response to complaints that gift card issuers changed expiration dates at will and purposely set very short redemption windows. Also, under the new rules, stores will be required to transfer unused balances to new cards at no charge, as long as the consumer can provide the card number and proof of activation.
Another change to gift cards is the new regulation of fees. Consumers have complained in the past that the issuers of gift cards tacked on fees for a wide variety of reasons, ranging from the failure to use the card in a certain month to fees for redeeming the card. Under the new regulations, gift card fees must be disclosed in plain language when the card is purchased. Gift card holders also have a one year grace period before monthly fees can be assessed.
The new rules do not affect pre-loaded debit cards, such as the type that are routinely given now instead of checks for rebates. They also do not affect reloadable debit cards (such as a Visa debit card) that are not labeled as gift cards.
Click here to read more about the new gift card rules.