New Rules for Gift Cards
Branded gift cards – including network-branded cards from Visa, Masterard, and American Express – are some of the many thousands of branded products that we at Quintain Marketing provide for our clients. They make a great reward for employees or loyal customers and have a high perceived value. Sounds great – until the recipient calls you to complain that after a year of sitting in their desk, the gift card that was once valued at $25 is now worthless because of the hidden fees associated with it.
The good news is that the United States Federal Reserve has issued new rules relating to gift cards that will take place on August 22 of this year. These rules will ban gift card issuers from charging fees for dormancy or inactivity, as well as service fees within the first year of purchase of a gift card. After the first year, companies can’t charge more than one fee per month.
Although gift card issuers will face tougher rules regarding the disclosure of fees, we suggest that if you are planning on giving gift cards as a promotion, you consider including your own note letting the recipient know when fees will be levied and how they will impact the value of the card over time. Your extra efforts will be much appreciated!