The Federal Reserve proposed rules Monday that would protect gift card users from fees and other unexpected restrictions.
According to the Fed, more than 95% of Americans have received or bought gift cards. But many shoppers complain about the fine print.
"Concerns have been raised regarding the amount of fees associated with gift cards, the expiration dates of gift cards and the adequacy of disclosures," the Fed said.
"Consumers who do not use the value of the card within a short period of time may be surprised to find that the card has expired or that dormancy or service fees have reduced the value of the card."
Under the proposed rules, gift cards would not expire until at least five years after the purchase date.
Service and inactivity fees could be charged only after a card had been inactive at least a year; even then, the fees could be charged no more than once a month and only if consumers had been given clear disclosures about them.
The rules would cover retail gift cards that can be used at a single merchant or affiliated group of merchants, as well as "network-branded" gift cards that can be redeemed at any store that accepts the card brand.
More than 40 states have already enacted their own gift card laws, the Fed said, although the rules vary widely. In California, most gift cards are prohibited from having expiration dates or fees.
"It's encouraging that gift card requirements might become more uniform so that holiday shoppers will have a better understanding of what they're actually buying," said Ellen Davis, vice president of the National Retail Federation, which said gift cards have been the most-requested holiday item for the last three years.
The Fed said the new provisions would be slated to take effect Aug. 22.