N.H. had a head start on new gift card rules
New tougher federal regulations on gift cards have taken effect, but New Hampshire consumers won't notice much of a change because the state's laws have already been clamping down on the products.Among the new rules and fees included in the Credit Card Accountability Responsibility and Disclosure Act, which became effective Aug. 22:• Issuers can no longer impose fees if there has been no activity with card for the first 12 months• Issuers must "clearly and conspicuously" state their fees• Issuers can no longer sell gift cards with expiration dates shorter than five yearsWhile some national retailers and banks may have to make adjustments to their cards, if they haven't done so already (many stores have already done away with expiration dates and some fees), expiration dates on gift certificates of less than $100 have been outlawed in New Hampshire since 1998.In 2003, the law was updated to include gift certificates of $100 or less. Those greater than $100 have also been considered redeemable for five years in New Hampshire, at which point they become "abandoned property" if not used.Many of the transaction cards Granite Staters use every day - such as reloadable coffee cards, prepaid telephone cards, paper gift certificates and various giveaways - are exempt from the new federal law."Honestly, this hasn't even been on our radar," said Nancy Kyle, president and chief executive of the Retail Merchants Association of New Hampshire. "We have comprehensive state laws that I believe are more strict than the federal law."Fees can still be chargedThose state laws have basically prepared New Hampshire merchants and those doing business in New Hampshire for the federal law, said Constance Stratton, senior assistant attorney general with the state Consumer Protection Bureau."Basically, the new law does not change state law unless state law is inconsistent with the federal law," said Stratton. "Protection is given by the state law if it is more strict."That doesn't mean that merchants cannot charge any fees, even in New Hampshire.If a gift card is actually issued through a bank or credit card company, such as Visa, fees such as initial service fees to activate the card, replacing a stolen card or if a card has been inactive for more than 12 months, can be charged under federal law."Gift cards issued by banks or in partnership with banks may lawfully contain an expiration date and may levy administrative charges and other fees," said the AG's office in a 2007 press release shortly after a case against the Simon Malls and its gift card practices was closed.With the new federal law, however, merchants may not charge these fees more than once a month. These cards also can have an expiration date of five years.In addition, the laws of the state where the card was purchased still hold, even if the consumer wants to redeem it in New Hampshire. So if a card is purchased in a state that simply conforms to the federal law, and is looser than New Hampshire's, there may be fees associated with it that are typically prohibited in the Granite State.An interesting conundrum for merchants, especially headed into the holiday season, is a fine point in the federal law that says prepaid cards will be excluded from the laws as long as they are not "marketed or labeled as a gift card or gift certificate."Another murky point leading to many exceptions to the federal law is what is considered a "clear and conspicuous" explanation of terms and fees.Consumers also must be careful about when the card was purchased. Bank cards or cards bought outside of New Hampshire before Aug. 22 can still charge a monthly fee if there is a balance on the card after a year until there is nothing left on the card.The moral of the story is to read the fine print that comes with the card, know exactly what type of card it is, and know when and where the card was purchased.For more information, visit the New Hampshire Attorney General's Consumer Sourcebook at doj.nh.gov/consumer/sourcebook.Cindy Kibbe can be reached firstname.lastname@example.org.