The new rules apply to activity as of Sunday, which means that the millions of cards already in circulation must be handled differently until they're all gone.
The new rules are fairly straightforward:
- Expiration Date Limits
The money on a gift card must be good for at least five years from the date the card is purchased, and any money that might be added to the card at a later date must also be good for at least five years.
- Replacement Cards
From the Fed's site for consumers: "If your gift card has an expiration date, you still may be able to use unspent money that is left on the card after the card expires. For example, the card may expire in five years but the money may not expire for seven. If your card expires and there is unspent money, you can request a replacement card at no charge." (We assume they mean that the replacement card will be provided at no charge, rather than not charging for making the request. That said, charging for consumers making the request would be nice.)
The rules also place new limits on fees. Overall, though, these changes will make it even more critical for programs to encourage these cards to be used--and used quickly--whether by the recipient or somebody else. Gift card exchange sites, which theoretically can get unwanted cards into the hands of those who will use them, might get a boost from the rules, especially those that try sharing more CRM data.
One of the longstanding frustrations with gift cards is that retailers have little insights into who receives them, making marketing next to impossible. Some gift card exchange sites have experimented with offering this kind of CRM data to retailers. Unfortunately, the site pushing the data exchange most aggressively--Leverage--seems to no longer have a functional Web site. Hopefully, this was one of those "it was the execution and not the idea" situations.