Last Tuesday, the Federal Reserve Board issued final rules relating to gift certificates, store gift cards, or general-use prepaid cards sold or issued to consumers primarily for personal, family, or household purposes. Under the final rule, no person may impose a dormancy, inactivity, or service fee with respect to a gift certificate, store gift card, or general-use prepaid card, unless: (1) there has been no activity with respect to the certificate or card within the one-year period prior to the imposition of the fee, (2) only one fee may be assessed in a given calendar month, and (3) disclosures regarding dormancy, inactivity, or service fees must be clearly and conspicuously stated on the certificate or card, and the person issuing or selling the certificate or card must provide these disclosures to the purchaser before the certificate or card is purchased. Additionally, the rule provides that a gift certificate, store gift card, or general-use prepaid card may not be sold or issued unless the expiration date of the funds underlying the certificate or card is no less than five years, and such information must be clearly and conspicuously stated on the certificate or card and disclosed prior to purchase. The final rule further prohibits the imposition of any fees for replacing an expired certificate or card if the underlying funds remain valid to ensure that consumers are able to access the underlying funds for the full five-year period, and requires disclosure on the certificate or card of a toll-free telephone number and, if one is maintained, a Web site, which a consumer may use to obtain fee information or replacement certificates or cards. Finally, loyalty, award, or promotional gift cards must state on the front of the card both that such cards are issued for loyalty, award, or promotional purposes, as well as any funds expiration date that may apply. In addition, all fees, including any dormancy, inactivity, or service fees, must be disclosed on or with the loyalty, award, or promotional gift card. The mandatory compliance date for the rule is Aug. 22, 2010, and certificates or cards sold on or after Aug. 22, 2010 must fully comply with the requirements of this section, including any disclosure requirements that apply.

TIP: Expiration dates less than five years on most gift cards will soon be prohibited, and fees on such cards are subject to strict requirements. Also, gift cards given as prizes can have expiration dates and fees, but they must be prominently disclosed. The front of the card must also state the expiration date and that the card is issued for loyalty, award, or promotional purposes.