Show Nav

Gift Card Regulations

Currently, Wisconsin does not regulate gift cards or gift certificates. Therefore, only federal rules and regulations apply to gift cards and certificates in Wisconsin.

Federal law regulates “gift certificates,” “store gift cards,” and “general-use prepaid cards” (collectively, “Certificates”). The rules are primarily addressed toward electronic certificates.

  1. There is an exclusion from the Federal requirements if the Certificate is issued “in paper form only”.
    • The regulators state that a Certificate that is electronically provided to a consumer is not issued in paper form only, even if the consumer can print and redeem the Certificate on paper, because the information necessary to redeem the Certificate was initially issued in electronic form and exists electronically.
    • Therefore, the exclusion only applies to Certificates that only ever existed on paper and not Certificates that have any electronic component.
  2. Federal requirements for Certificates include:
    • A prohibition on issuing a Certificate with an expiration date unless the expiration date is at least five years after the date when the Certificate was issued and the terms of expiration are clearly and conspicuously stated.
    • A prohibition on imposing a dormancy, inactivity charge, or service fee (collectively, “Fees”) on a Certificate, unless there has been no activity with respect to the Certificate in the 12-month period ending on the date on which the Fee is imposed.
    • A prohibition on charging more than one Fee in any given month.
    • To impose a Fee, certain pre-sale disclosures and certain disclosures on the Certificate itself. Similarly, if charges other than Fees are imposed, certain disclosures must be made.
      • Pre-sale disclosure requirements:
        • If a Fee may be charged, the fact that a Fee may be charged, the amount of the Fee, and how often the Fee may be assessed.
        • Whether the underlying funds expire and, if the funds expire, the date when they expire.
        • A toll-free phone number and website, if one is maintained, where a consumer may obtain a replacement Certificate after the Certificate expires if the underlying funds may be available.
        • Except where a non-reloadable Certificate bears an expiration date that is at least seven years from the date of manufacture, that the Certificate expires but the underlying funds either do not expire or expire later than the Certificate and that the consumer may contact the issuer for a replacement Certificate.
        • If any fee other than a Fee already disclosed is imposed, the type of fee, the amount of the fee (or an explanation of how the fee will be determined), and the conditions under which the fee may be imposed.
      • Disclosures on the Certificate itself: The Certificate must clearly and conspicuously state that:
        • If a Fee may be charged, the fact that a Fee may be charged, the amount of the Fee, and how often the Fee may be assessed.
        • Whether the underlying funds expire and, if the funds expire, the date when they expire.
        • A toll-free phone number and website, if one is maintained, where a consumer may obtain a replacement Certificate after the Certificate expires if the underlying funds may be available
        • Except where a non-reloadable Certificate bears an expiration date that is at least seven years from the date of manufacture, that the Certificate expires but the underlying funds either do not expire or expire later than the Certificate and that the consumer may contact the issuer for a replacement Certificate.
        • A toll-free telephone number and, if one is maintained, a website, that a consumer may use to obtain information about Fees and other charges.
      • Disclosures required to be on the Certificate cannot be made only in an accompanying terms and conditions document, on packaging surrounding a Certificate, or on a sticker or label affixed to the Certificate. On an electronic Certificate, these disclosures must be provided electronically on the Certificate provided to the consumer.

To download a fact sheet from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) that gives a general overview of gift card regulations in WI, visit https://datcp.wi.gov/Pages/Publications/GiftCards428.aspx

For more detailed information, contact your Boardman Clark attorney.

DISCLAIMER: The information provided is for general informational purposes only. This post is not updated to account for changes in the law and should not be considered tax or legal advice. This article is not intended to create an attorney-client relationship. You should consult with legal and/or financial advisors for legal and tax advice tailored to your specific circumstances.

More from Business Minute

*bc*