Gift Cards

Subscribe to Gift Cards

In the 2010s, Kelley Drye’s Ad Law Access blog posted approximately 1500 entries. Below are the most popular by year. To give you a sense of beginning to end, the first post came one month after Apple announced the iPad and the last just days before the first all-female spacewalk by astronauts Christina Koch and…

Yesterday the CFPB released a final rule that will impose a variety of consumer protection requirements on prepaid products, such as requiring specified disclosures before product purchase and compelling financial institutions to limit consumer losses for lost or stolen cards.  The CFPB had previously released a proposed rule, which we discussed here, and the…

CFPB Director Richard Cordray testified before the House Financial Services Committee today, fielding questions and comments on an array of issues from the CFPB’s data collection practices to the Qualified Mortgage Rule, which went into effect on January 10, 2014. The hearing was scheduled in response to the CFPB’s release of its fourth Semi-Annual Report…

The Consumer Financial Protection Bureau (CFPB) recently released its final determinations concerning whether Maine and Tennessee unclaimed property laws were preempted by the federal gift card law prohibiting expiration of gift card funds within five years of issuance. The decisions represented the first time that the CFPB used its authority to issue preemption determinations. More…

Last week, the Consumer Financial Protection Bureau (CFPB) issued its final determination regarding whether Maine and Tennessee unclaimed property laws were preempted by the federal Credit Card Accountability and Responsibility and Disclosure Act of 2009 (“the Credit CARD Act”). Both state laws provided that certain gift cards would be deemed abandoned as early as two…

Last year, we discussed a class action lawsuit against Groupon alleging that the company’s deals violate California and federal gift card laws. The plaintiffs argued that Groupon’s deals constitute gift cards, and that the expiration on the deals violate federal and state laws that restrict expiration dates. Although Groupon denies they violated any law, the…

This week, a California Superior Court approved a settlement agreement in a class-action lawsuit alleging that Amway Corporation and its related companies violated gift card laws. Amway’s gift cards included a notation instructing consumers to "redeem before" a certain date. The plaintiffs argued that this notation violated a California law that prohibits expiration dates on…

Last month, consumers filed a class action lawsuit against Groupon, alleging that the company’s deals violate California and federal gift certificate laws. This month, a similar lawsuit was filed against LivingSocial, alleging that the company’s deals violate Washington and federal gift certificate laws.

Approximately half the states have laws that either restrict or prohibit expiration…

This is an update to an earlier post regarding the Federal Reserve Board’s final rules implementing the gift card provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (“CARD Act”). On July 27, 2010, H.R. 5502 was signed into law, extending the effective date of disclosure requirements under the CARD Act from August 22, 2010 to January 31, 2011, for qualifying gift cards produced prior to April 1, 2010. You may recall that the rules restrict fees and expiration dates on various types of gift certificates and cards, and require sellers and issuers to make specific disclosures.

Gift Certificates, Store Gift Cards, and General-Use Prepaid Cards

Generally, the rules restrict fees, expiration dates, and impose certain disclosure requirements for (A) gift certificates, (B) store gift cards, and (C) general-use prepaid cards, as these terms (collectively, “gift cards”) are defined in the CARD Act.

Definitions

(A) Gift Certificates – are defined in the CARD Act as a card, code, or other device that is: (i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo; (ii) issued in a specified amount that may not be increased or reloaded; (iii) purchased on a prepaid basis in exchange for payment; and (iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

(B) Store Gift Cards – these types of cards are commonly known as “closed-loop cards”, and are essentially the same as Gift Certificates, but are reloadable or may be increased in value. The CARD Act specifically defines these cards as electronic promises, plastic cards, or other payment codes or devices that are: (i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo; (ii) issued in a specified amount, whether or not that amount may be increased in value or reloaded at the request of the holder; (iii) purchased on a prepaid basis in exchange for payment; and (iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.

(C) General-Use Prepaid Cards – commonly referred to as “open-loop cards”, are defined in the CARD Act as cards or other payment codes or devices issued by any person that are: (i) redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines; (ii) issued in a requested amount, whether or not that amount may, at the option of the issuer, be increased in value or reloaded if requested by the holder; (iii) purchased or loaded on a prepaid basis; and (iv) honored, upon presentation, by merchants for goods or services or at automated teller machines.…

Continue Reading UPDATE: New Gift Card Rules To Take Effect on August 22, 2010 and Disclosure Requirements Will Now Take Effect on January 31, 2011

After working through the night, the Congressional conference committee tasked with negotiating a final financial reform bill voted 27-16 to approve the bill and send it back to each chamber for a final vote on the conference report.

Recaps of the long day and night of negotiations and the final bill are available from Poltico…