Class Action

Credit Card Accountability Responsibility and Disclosure Act of 2009 (“Credit Card Act”): New Gift Card Legislation

By Michael J. Hassen

Martin H. Orlick Discusses New Gift Card Legislation

More than half (55%) of people asked in a survey will request a gift card as their gift of choice this holiday season. Shoppers, on average, will each spend $139.91 on gift cards this year and 77.2% of people will buy at least one gift card during the holidays, according to a survey by the National Retail Federation and BIGresearch.

According to the Code of Federal Regulations,

“A gift card is a prepaid card that is designed to be purchased by one consumer and given to another consumer as a present or expression of appreciation or recognition. When provided in the form of a plastic card, a user of a gift card is able to access and spend the value associated with the device by swiping the card at a point-of-sale terminal, much as a person would use a debit card. Among the benefits of a gift card are the ease of purchase for the gift-giver and the recipient’s ability to choose the item or items ultimately purchased using the card.”

While gift cards have been successful for retailers in attracting new customers and keeping old ones, implementing them requires retailers to follow state and federal laws which are often complex and conflicting. California and an increasing number of states have already enacted gift certificate and gift card laws restricting transaction, maintenance and dormancy fees and prohibiting expiration. By now, few, if any, retailers sell gift certificates or gift cards that will expire. Some leading retailers have even eliminated dormancy and maintenance fees altogether.

Full post as published by Class Action Defense Blog on January 04, 2010 (boomark / email).