Federal Regulations issued under the CARD act became effective on August 22, 2010. These regulations, 12 CFR pt. 205, provide many protections for consumers with credit cards, bank accounts and gift cards. In one key provision, the regulations require that a gift card may not expire for at least five years. Massachusetts law, though, already requires that gift cards don't expire for at least seven years (MGL c.200A, s.5D). So why do we need to care?
According to the Mass. Attorney General, cards issued by national banks are bound by the Federal rules, not the state law. "State law does not apply to gift cards issued by a national bank, even though these cards may be issued by an entity other than the bank. For instance, Simon Mall Gift Cards do not follow the seven year rule and also charge fees, because the cards are issued in conjunction with a national bank."
The new Federal regulations not only define a minimum time before expiration, but also limit dormancy, inactivity, or service fees. This is all very good news for Massachusetts consumers purchasing mall gift cards.
More information on gift cards in Massachusetts is available at Mass. Law About Shopping and Returns.