Carolyn, What Was The Legislation That Caused This

Hi Henry,

Here’s what I have found so far. Blaming the state in this article in unfair since both federal and state laws regulate gift cards. The state of Vermont laws reflect the federal laws. From what I read, it appears that recent federal legislation was passed to protect consumers. The new law establishes a minimum expiration date and prohibits some fees.

The Vermont Legislative Fiscal Office explains the federal change by saying ‘the Credit CARD Act of 2009 prohibits gift cards (store issued or bank issued “gift cards”) from expiring before 5 years from the date of purchase or when money was last loaded onto a card, and prohibits fees for the first 12 months. These consumer protections will go into effect next summer. Stronger state laws will remain valid.’

Current Vermont law is explicit that:
•   No expiration for three years.
•   No fees, except that a licensed money transmitter, financial institution or credit union may charge a one-time issuance fee of either $10 or 10%, whichever is smaller.
•   If remaining value is $1.00 or less, may redeem remainder for cash.
•   Consumer may redeem unused portion after expiration date if requested.
•   Does not cover access device such as a debit card or other access means to a consumer’s account regularly maintained at a bank to access funds or to initiate an electronic funds transfer from the account.
Now, there is a bill, H.730, which has passed the House and is now in the Senate. It is not law and may not pass at all, but this bill extends the expiration in Vermont law to five years, among other changes, just like the federal law. I believe this news article is complaining about the federal changes which go into effect this summer. If the Vermont law, H.730 passes, it will make our state the same as federal law, and I think the merchants in the news article don’t like having to honor cards for that long. I'm not an expert in this area, so I’ll continuing looking for information on this.

Carolyn