August 22, 2010 was a big day for gift cards. It was the effective date of the gift card provision contained within the Credit CARD Act of 2009. The new Federal Gift Card Laws provided enhanced protection for consumers and today is the one year anniversary of the changes.
One of the key aspects of the legislation was including bank-issued gift cards. These are gift cards with Visa, MasterCard, American Express and Discover logos. State gift card laws do not apply to bank-issued gift cards and they were among the worst when it came to fees and expiration dates.
After federal laws went into effect, some companies discontinued their bank-issued gift card programs because they were no longer profitable. Others, altered their programs to be even more consumer friendly than the law requires. In the end, it was a mixed bag, but I see the changes as a positive for consumers and the gift card industry.
State Gift Card Laws Still Matter
In the end, gift cards are popular as ever. While the federal gift card laws enhanced consumer protection, there are several states with laws exceeding consumer protection provided by those set by the federal government. In other words, state gift card laws still matter and consumers should be aware of their rights.
For example, Oregon Gift Card Law was recently changed to allow consumers to receive a cash refund if the gift card has been used once and the balance is less than $5.00. These changes will be effective January 1, 2012.
Expect more changes to come in the area of cash back laws. It's something not covered under the federal gift card protections, so it's an obvious enhancement. Also, here is a list of states offering cash back requirements for gift cards.