Prepaid Blog

There’s been a lot of buzz lately about the new Gift Card Act (Title IV of the Credit Card Accountability Responsibility and Disclosure Act of 2009) as well as the newly published final version of the Gift Card Rules.  The documents relating to this legislation are lengthy, and let’s face it; nobody has the time (or desire) to read through them all!  I wanted to write a summary of sorts for everyone, hopefully providing an easy to understand reference. 

The Gift Card Act is comprised of three primary prohibitions:

1. Certain fees are prohibited from being charged to the Gift Card unless specific conditions are met.
2. Expiration dates on the funds are prohibited unless specific conditions are met.
3. It requires additional disclosures to the cardholder within the collateral material (terms and conditions, privacy statements, etc.).

 From reading the three points above it sounds pretty simple, right?  Not so fast!  Those ‘conditions’ that are mentioned completely change how a card program can function. 

First, we need to understand that the legislation makes a clear distinction between Gift Cards and Loyalty, Award and Promotional Cards (LAP Cards).  Because LAP Cards are generally not funded by the consumer, but rather an employer, merchant or other corporate entity they are excluded from many of the parameters described above.   

The Gift Card Rules do state that LAP Cards must:

1. State that they are issued for Loyalty, Award or Promotions.
2. State the date of funds expiration.
3. Disclose a toll-free telephone number and website for which cardholders can use to see any fees associated with the card.

 So what changes for your incentive program?  The short answer is, not much!  1to1 is working behind the scenes to change some collateral materials.  We need to ensure that the incentive cards are not being marketed in a way where they could be construed as gift cards.  So, you may see some changes to things like cardholder URLs or thermal printing on the front of stock cards.  The other guidelines are already being followed!

If you have any questions regarding the Gift Card Act or Rules, please call 630-754-4800.

This document is meant for informational purposes only and is not intended to be a source of legal advice.  For legal advice, please contact an attorney.

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1to1 Card by Kelly