New rules go into effect today in Manitoba, Canada, which prohibit inactivity fees on most gift cards. Exceptions apply to cards for specific goods or services or those that are given away for free. Fees are permitted to replace lost or stolen cards and to customize the face of the card.
Prior changes to the law prohibited expiration dates and required disclosure of all terms and conditions. If an individual violates the Manitoba gift card law, they could be subject to fines ranging from $1,000 to $5,000, while companies could be subject to fines ranging from $5,000 to $20,000.
Previously, shopping mall gift cards could be charged fees if they had not been active for 12 consecutive months.
Businesses considering gift cards must comply with a variety of state and federal laws, including consumer protection and unclaimed property laws. Businesses operating in Canada and other foreign jurisdictions have added layers of complexity to ensure compliance with all applicable laws. In addition to administrative penalties for non-compliance, companies could be subject to litigation over their gift card programs (Abercrombie, Google, Borders).
Please contact Barganier and Associates if your company is considering offering gift cards.