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If you find a gift card tucked in your stocking this year, don’t assume that the information printed on the back of it is correct. In fact, there’s a reasonable chance that the expiration date and fee rules are wrong.
This latest snafu is the result of a little-noticed change to the gift-card rules of the Credit CARD Act of 2009. The act requires that gift card funds remain valid for at least five years and limits when and how often card issuers can charge certain fees. For the details, see the summary posted on Defend Your Dollars, a Consumers Union advocacy website.
The new rules are good for consumers, but only if they know about them. So the CARD Act also requires that the new expiration dates and fee rules be printed on the cards, along with a toll-free number for cardholders who have any questions. And that’s where things got tripped up.
The CARD Act’s gift card provisions took effect Aug. 22. But less than a month before that, Congress passed an amendment giving card issuers more time—until Jan. 31, 2011—to get noncompliant gift cards off the shelves. All the new gift card rules contained in the CARD Act still hold, but information printed on the cards doesn’t have to be correct until after the holidays.
Suzanne Martindale, an attorney at Consumers Union, the nonprofit publisher of Consumer Reports, says that financial institutions were behind the amendment because they had the most at stake. “These are the issuers that sell multiple-use cards with a major network logo like American Express, Discover, or Visa. Those types of cards are more likely to come with fees and expiration dates printed on the cards that are now obsolete under the new law,” she says. “Single-retailer gift cards usually don’t expire and are less likely to deduct fees, so the disclosure requirements are less likely to affect them.”