New Law Affects Gift Cards and Gift Certificates

Many of us seem to end up with gift certificates and gift cards that we don’t use as soon as anticipated and have probably dealt with ones that have expired. New Federal regulations regarding pre-paid cards, gift cards and gift certificates took effect on August 22, 2010.

Gift cards, pre-paid cards and gift certificates sold after August 22, 2010 must have expiration dates of not less than five years from the date of issue. In the event that state law provides for a longer period of time prior to expiration, the state law preempts the Federal law.

In the past, many gift cards or certificates would expire in one year if not redeemed. The new law does not apply to (1) pre-paid cards used solely for telephone services; (2) cards that are reloadable and not marketed or labeled as gift cards or gift certificates; (3) cards not marketed to the general public; (4) a card given as a loyalty and other promotion award; and (5) gift certificates issued in paper form and only redeemable for admission to events (e.g. concert tickets) or for the purchase of goods or services in conjunction with the admission, specific goods or services such as a spa treatment, hotel stay or airline voucher, and certain percentage off the purchase price or service coupons.

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