(a) Definitions. For purposes of this section, except as excluded
under paragraph (b), the following definitions apply:
(1) Gift certificate means a card,
code, or other device that is:
(i) Issued on a prepaid
basis primarily for personal, family, or household purposes to a consumer
in a specified amount that may not be increased or reloaded in exchange
for payment; and
(ii) Redeemable upon presentation at a single merchant or an affiliated
group of merchants for goods or services.
(2) Store gift card means a card, code, or other device that is:
(i) Issued
on a prepaid basis primarily for personal, family, or household purposes
to a consumer in a specified amount, whether or not that amount may
be increased or reloaded, in exchange for payment; and
(ii) Redeemable upon presentation
at a single merchant or an affiliated group of merchants for goods
or services.
(3) General-use prepaid card
(i) Issued on a prepaid
basis primarily for personal, family, or household purposes to a consumer
in a specified amount, whether or not that amount may be increased
or reloaded, in exchange for payment; and
(ii) Redeemable upon presentation at
multiple, unaffiliated merchants for goods or services, or usable
at automated teller machines.
(4) Loyalty, award, or promotional gift
card means a card, code, or other device that:
(i) Is issued
on a prepaid basis primarily for personal, family, or household purposes
to a consumer in connection with a loyalty, award, or promotional
program;
(ii) Is
redeemable upon presentation at one or more merchants for goods or
services, or usable at automated teller machines; and
(iii) Sets forth the following disclosures,
as applicable:
(A) A statement indicating that the card,
code, or other device is issued for loyalty, award, or promotional
purposes, which must be included on the front of the card, code, or
other device;
(B) The
expiration date for the underlying funds, which must be included on
the front of the card, code, or other device;
(C) The amount of any fees that may be imposed
in connection with the card, code, or other device, and the conditions
under which they may be imposed, which must be provided on or with
the card, code, or other device; and
(D) A toll-free telephone number and, if one
is maintained, a Web site, that a consumer may use to obtain fee information,
which must be included on the card, code, or other device.
(5) Dormancy or inactivity fee. The terms “dormancy
fee” and “inactivity fee” mean a fee for non-use of or inactivity
on a gift certificate, store gift card, or general-use prepaid card.
(6) Service fee. The term “service fee” means
a periodic fee for holding or use of a gift certificate, store gift
card, or general-use prepaid card. A periodic fee includes any fee
that may be imposed on a gift certificate, store gift card, or general-use
prepaid card from time to time for holding or using the certificate
or card.
(7) Activity. The term “activity” means any
action that results in an increase or decrease of the funds underlying
a certificate or card, other than the imposition of a fee, or an adjustment
due to an error or a reversal of a prior transaction.
(b) Exclusions. The
terms “gift certificate,” “store gift card,” and “general-use prepaid
card”, as defined in paragraph (a) of this section, do not include
any card, code, or other device that is:
(1) Useable solely for telephone services;
(2) Reloadable and not
marketed or labeled as a gift card or gift certificate. For purposes
of this paragraph (b)(2), the term “reloadable” includes a temporary
non-reloadable card issued solely in connection with a reloadable
card, code, or other device;
(3) A loyalty, award, or promotional gift
card;
(4) Not marketed
to the general public;
(5) Issued in paper form only; or
(6) Redeemable solely for admission to
events or venues at a particular location or group of affiliated locations,
or to obtain goods or services in conjunction with admission to such
events or venues, at the event or venue or at specific locations affiliated
with and in geographic proximity to the event or venue.
(c) Form of disclosures.
(1) Clear and conspicuous. Disclosures made under this section must
be clear and conspicuous. The disclosures may contain commonly accepted
or readily understandable abbreviations or symbols.
(2) Format. Disclosures made under this section generally must be provided to
the consumer in written or electronic form. Except for the disclosures
in paragraphs (c)(3) and (h)(2), written and electronic disclosures
made under this section must be in a retainable form. Only disclosures
provided under paragraphs (c)(3) and (h)(2) of this section may be
given orally.
(3) Disclosures prior to purchase. Before a
gift certificate, store gift card, or general-use prepaid card is
purchased, a person that issues or sells such certificate or card
must disclose to the consumer the information required by paragraphs
(d)(2), (e)(3), and (f)(1) of this section. The fees and terms and
conditions of expiration that are required to be disclosed prior to
purchase may not be changed after purchase.
(4) Disclosures
on the certificate or card. Disclosures required by paragraphs
(a)(4)(iii), (d)(2), (e)(3), and (f)(2) of this section must be made
on the certificate or card, or in the case of a loyalty, award, or
promotional gift card, on the card, code, or other device. A disclosure
made in an accompanying terms and conditions document, on packaging
surrounding a certificate or card, or on a sticker or other label
affixed to the certificate or card does not constitute a disclosure
on the certificate or card. For an electronic certificate or card,
disclosures must be provided electronically on the certificate or
card provided to the consumer. An issuer that provides a code or confirmation
to a consumer orally must provide to the consumer a written or electronic
copy of the code or confirmation promptly, and the applicable disclosures
must be provided on the written copy of the code or confirmation.
(d) Prohibition
on imposition of fees or charges. 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, in the one-year period ending on the date
on which the fee is imposed;
(2) The following are stated, as applicable,
clearly and conspicuously on the gift certificate, store gift card,
or general-use prepaid card:
(i) The amount of any dormancy,
inactivity, or service fee that may be charged;
(ii) How often such fee may be assessed;
and
(iii) That such
fee may be assessed for inactivity; and
(3) Not more than one dormancy, inactivity,
or service fee is imposed in any given calendar month.
(e) Prohibition on sale
of gift certificates or cards with expiration dates. No person
may sell or issue a gift certificate, store gift card, or general-use
prepaid card with an expiration date, unless:
(1) The person has established policies
and procedures to provide consumers with a reasonable opportunity
to purchase a certificate or card with at least five years remaining
until the certificate or card expiration date;
(2) The expiration date for the underlying
funds is at least the later of:
(i) Five years after
the date the gift certificate was initially issued, or the date on
which funds were last loaded to a store gift card or general-use prepaid
card; or
(ii) The
certificate or card expiration date, if any;
(3) The following disclosures
are provided on the certificate or card, as applicable:
(i) The expiration
date for the underlying funds or, if the underlying funds do not expire,
that fact;
(ii) A
toll-free telephone number and, if one is maintained, a Web site that
a consumer may use to obtain a replacement certificate or card after
the certificate or card expires if the underlying funds may be available;
and
(iii) Except
where a non-reloadable certificate or card bears an expiration date
that is at least seven years from the date of manufacture, a statement,
disclosed with equal prominence and in close proximity to the certificate
or card expiration date, that:
(A) The certificate or card expires,
but the underlying funds either do not expire or expire later than
the certificate or card, and;
(B) The consumer may contact the issuer for
a replacement card; and
(4) No fee or charge is imposed on the
cardholder for replacing the gift certificate, store gift card, or
general-use prepaid card or for providing the certificate or card
holder with the remaining balance in some other manner prior to the
funds expiration date, unless such certificate or card has been lost
or stolen.
(f) Additional disclosure requirements for gift certificates or cards. The following disclosures must be provided in connection with a
gift certificate, store gift card, or general-use prepaid card, as
applicable:
(1) Fee disclosures. For each type of fee that
may be imposed in connection with the certificate or card (other than
a dormancy, inactivity, or service fee subject to the disclosure requirements
under paragraph (d)(2) of this section), the following information
must be provided on or with the certificate or card:
(i) The
type of fee;
(ii)
The amount of the fee (or an explanation of how the fee will be determined);
and
(iii) The conditions
under which the fee may be imposed.
(2) Telephone
number for fee information. A toll-free telephone number and,
if one is maintained, a Web site, that a consumer may use to obtain
information about fees described in paragraphs (d)(2) and (f)(1) of
this section must be disclosed on the certificate or card.
(g) Compliance dates.
(1) Effective date for gift certificates, store gift cards, and general-use
prepaid cards. Except as provided in paragraph (h), the requirements
of this section apply to any gift certificate, store gift card, or
general-use prepaid card sold to a consumer on or after August 22,
2010, or provided to a consumer as a replacement for such certificate
or card.
(2) Effective date for loyalty, award, or promotional
gift cards. The requirements in paragraph (a)(4)(iii) apply to
any card, code, or other device provided to a consumer in connection
with a loyalty, award, or promotional program if the period of eligibility
for such program began on or after August 22, 2010.
(h) Temporary exemption.
(1) Delayed effective date. For any gift certificate, store gift
card, or general-use prepaid card produced prior to April 1, 2010,
the effective date of the requirements of paragraphs (c)(3), (d)(2),
(e)(1), (e)(3), and (f) of this section is January 31, 2011, provided
that an issuer of such certificate or card:
(i) Complies with all
other provisions of this section;
(ii) Does not impose an expiration date
with respect to the funds underlying such certificate or card;
(iii) At the consumer’s
request, replaces such certificate or card if it has funds remaining
at no cost to the consumer; and
(iv) Satisfies the requirements of paragraph
(h)(2) of this section.
(2) Additional
disclosures. Issuers relying on the delayed effective date in
section 205.20(h)(1) must disclose through in-store signage, messages
during customer service calls, Web sites, and general advertising,
that:
(i) The underlying funds of such certificate
or card do not expire;
(ii) Consumers holding such certificate or card have a right to a
free replacement certificate or card, which must be accompanied by
the packaging and materials typically associated with such certificate
or card; and
(iii)
Any dormancy, inactivity, or service fee for such certificate or card
that might otherwise be charged will not be charged if such fees do
not comply with Section 915 of the Electronic Fund Transfer Act.
(3) Expiration of additional disclosure requirements. The disclosures in paragraph (h)(2) of this section:
(i) Are
not required to be provided on or after January 31, 2011, with respect
to in-store signage and general advertising.
(ii) Are not required to be provided
on or after January 31, 2013, with respect to messages during customer
service calls and Web sites.
