What are the restrictions on imposing service fees on gift cards?

Under the Credit CARD Act, most service fees on gift cards such as dormancy fees or usage fees can only be charged if:

  • you haven't used your card for at least one year and
  • you are only charged one fee per month.

Information on the service fees that can be imposed is now required to be placed on the gift card or the gift certificate.

Information on other fees that can be imposed, as well as a toll-free telephone number and, if one is maintained, a website where information is available, can be provided:

  • on the gift card or gift certificate; or
  • included in the packaging with the gift card or the gift certificate.

However, for gift cards that were produced before April 1, 2010, the disclosure rules only go into effect on January 31, 2011, as long as the issuer makes certain other disclosures on in-store signs, messages during customer service calls, websites, and general advertising explaining that:

  • The funds underlying the gift card do not expire;
  • Consumers have the right to receive a free replacement card, along with the packaging and materials that typically accompany the gift card; and
  • The issuer will charge dormancy, inactivity, or service fees only if the fee is permitted by the gift card rule.