Federal Issues

CARD Act of 2009 – New Gift Card and Gift Certificate Rules

Dear Member:

Effective Sunday, August 22, 2010, under the Credit Card Accountability Responsibility and Disclosure Act of 2009, new rules became effective relating to gift cards and gift certificates sold by retailers.

Under these new regulations, retailers cannot charge an inactivity fee until the card or certificate has not been used for a full year, set an expiration date any earlier than five years after the card has been issued and charge more than one fee in a single month (after there has been no activity in the preceding 12 months). Retailers can charge a one-time fee to be paid when the card or certificate is purchased. Retailers must also print information on the card or certificate disclosing any fees and the expiration date and provide a toll-free phone number or website to get more information.

H.R. 5502 (Gift Card Amendment) does amend the law and inserts a provision extending the effective date to January 31, 2011 for gift certificates, store gift cards and general-use prepaid cards produced prior to April 1, 2010 provided that card issuers alert buyers and recipients about the terms and fees associated with any cards issued without a disclosure printed on the card. Disclosure requirements are met by providing notice to consumers via in-store signage, messages during customer service calls, on websites and in general advertising.

The disclosure must include:

• Any such card for which funds expire shall be deemed to have no expiration date with respect to the underlying funds.
• Consumers holding a Card have a right to a free replacement Card that includes the packaging and materials typically associated with such Card.
• Any dormancy fee, inactivity fee or service fee for such Cards that might otherwise be charged will not be charged it the fee(s) do not comply with the Card Act.
• Providing these notices is to continue until January 31, 2013.

These rules do not cover rebate and loyalty reward cards or re-loadable cards, such as prepaid phone cards or rechargeable debit cards.

Federal Interchange Bill

Dear Retailer:

In the last few weeks, we have had several inquiries regarding the new Federal Interchange Bill.

Attached are three documents that the National Grocers Association and Food Marketing Institute have prepared to help education retailers about the recent passage of this bill, which was signed by President Obama on July 21, 2010.

• Implementation of New Debit and Credit Interchange Reforms
• Supermarket Industry Guidance on How to Implement Reforms on RCNP
• Durbin Interchange Reforms and Timeline

American’s Against Food Tax

A coalition of groups have started a website to protest any tax increases on food and beverages.

Americans Against Food Taxes is a coalition of concerned citizens – responsible individuals, financially strapped families, small and large businesses in communities across the country – opposed to the Government’s proposed tax hike on food and beverages, including soda and juice drinks.

The coalition has twin primary aims:

1) To promote a healthy economy and healthy lifestyles by educating Americans about smart solutions that rely upon science, economic realities and common sense; and
2) To prevent the enactment of this regressive and discriminatory tax that will not teach our children how to have a healthy lifestyle, and will have no meaningful impact on child behavior or public health, but will have a negative impact on American families struggling in this economy.

Website: http://www.nofoodtaxes.com/