The Federal Reserve is proposing new rules on fees for prepaid gift cards and this is a welcome change as the holiday buying season nears. Many people shy away from prepaid gift cards because there can be fees and expiration dates involved. However, the new rules meant to reign-in fees on prepaid gift cards are looking to stop fees unless the gift card has not been used in over a year and in that case there can be only one fee per month. Also, according to an article on money.cnn.com, “the rules would also prevent issuers from charging fees for monthly maintenance, balance inquiry, transactions, reloading, and at the point of the sale.” The Federal Reserve also wants to change the length of expiration dates on prepaid gift cards to give cardholders more time.
These changes should help to raise the numbers for prepaid gift cards sold because if a consumer is looking to buy a prepaid gift card but is worried that it may expire or some of the money they put on the card will go to fees then they usually will seek out a better purchase for their money.
Prepaid gift cards would be a great help to many retailers now because they bring in cash immediately and leave products on the shelves. Obviously those products will eventually be sold but in the tough economy retailers could use the help with boosting their profits. If a twenty-dollar item is on the shelf and a prepaid gift card is bought for the same amount then the retailer will have made the money and still have the item on the shelf to sell. Hopefully, they will then be more likely to take in more money presently or move merchandise that many not sell as well as predicted on.
It’s true that the rules against fees on these prepaid gift cards will bring in less to the merchant since fees and expiration dates were basically free money to the stores. However, if these new rules on fees and expiration dates for those prepaid gift cards cause more gift cards to be sold then the likelihood of profiting goes up because cardholders are more likely to go over the amount on the card when making purchases than not, so the retailers can make a profit and the customers won’t feel cheated.
Rather than getting your loved one a gift card for the holidays it might be a good idea to consider other options. Some in Arizona are looking for Craigslist cars in hopes of getting their significant other a reliable vehicle this year. It is interesting to see just how many people are looking to purchase a vehicle on Craigslist as prices have remained very low with a number of classifieds uploaded every single day.