Posted March 12, 2013 by Chris Warren in Gift Cards

Gift Cards

Gift Cards
Gift Cards

Many have opted for gift cards to help simplify their gift giving.  Most gift  cards have no expiration date and are typically not reloadable.  The card is generally for a fixed amount and cannot be exchanged for cash.

A gift card may resemble a credit card, but does not offer a line of credit.  The card is identified by a specific number or code and is not usually embossed with an individual name, making it flexible and a great gift idea.  For security reasons, many of them have no value until they are activated by the cashier.  To thwart counterfeiting, the data is encrypted and the magnetic strip is often placed differently than on credit cards.

They can be custom tailored to meet specific needs and a custom message or photo can also be added to personalize the card.  Additional fees may apply.

Gift cards are vastly different from gift certificates.  Certificates are usually sold as a paper document with an authorized signature by a restaurant, store, or other individual establishment as a voucher for future products or services.  They typically require no electronic authorization and may or may not have an expiration date or administrative fees.

An addendum to the Credit CARD Act of 2009 directs the federal government to create consumer-friendly standards pertaining to gift cards.  The new regulations prohibit retailers from setting expiration dates unless they are at least 5 years after the card's date of issue or the date on which funds were last added to the card.  Retailers are also no longer able to access dormancy, inactivity, or service fees unless the card has been inactive for at least 12 months, and if fees are added after that period, the details of such fees must be clearly disclosed on the card.  Retailers are not allowed to levy more than one fee per month.


Chris Warren