Gift cards make quick, easy, casual gifts, and are sometimes the simplest selection for redeeming credit card rewards points online. But like everything else lately, some of them arrive with thorns hidden amongst the benefits, such as activation fees, too-close expiry dates, or bizarre rules the shops put forward seemingly just to confound customers.

In the U.S., gift cards are the latest focus of federal government regulators. The Federal Reserve, which currently has the responsibility for such consumer protection oversight, has proposed new decrees requiring all fees be clearly displayed at point of purchase and that all gift cards be valid for five years from the date of issuance.

Further, certain fees would be banned or restricted, including inactivity fees or service fees that are judged too high, “unexpected” charges, and charges to replace an expired card if it still carries monetary value.

Tighter regulations protecting consumers have been in vogue in the U.S. since the financial crash last year placed significant stresses on households’ finances. New laws limiting banking and credit card fees have recently taken effect, requiring greater disclosure and customers “opting in” to such things as overdraft coverage with fees, or higher credit limits or interest rates.

Perhaps Australians, too, should be asking more questions before shelling out millions of dollars for gift cards this Christmas.

Source: news.com.au