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December 16, 2007
Non-bank gift cards an even better deal than before
Thanks to vigilance by state legislators, state enforcers and the FTC, store-issued gift cards have even fewer fees than before and are an even better deal than high-priced fee laden bank and mall issued cards, according to a story Gift Cards Coming With Fewer Strings by Nancy Trejos of the Washington Post. The story goes on to also point out: Many retailers have responded to consumer complaints that gift cards are too laden with fees and expiration dates, experts said. In its fifth annual gift card survey, Montgomery County's Office of Consumer Protection found that 18 of the 22 retail cards examined had no fees and no expiration dates and could be replaced if lost or stolen or had scratch-off PINs for security. The FTC regulates financial institutions that are neither banks nor subsidiaries of banks. Meanwhile, most mall cards (usable at more than one store) are actually issued by national banks. National banks also issue their own various Visa or Mastercard branded gift cards. National banks are regulated by the bank regulator known as the OCC, which is more of a national bank "non-regulator" (previous blog). The OCC continues to allow and encourage banks to impose punitive fees against unused gift cards. While we wish that the FTC had done more to force companies to disgorge profits taken from gift card fees, its actions, unlike those of the OCC, have made the marketplace better.
Posted by Ed Mierzwinski at December 16, 2007 09:24 AM
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