The changes seek to address the practice by many retailers of not including an expiration date on gift cards, and of charging a fee for activating gift cards after more than a year without use.

The proposed regulations, which go into effect on August 22, 2010, also would give consumers more time to use gift cards by extending the expiration date to five years.

According to the financial consulting firm TowerGroup, people in the United States spend about $65 billion in gift cards every year yet do not redeem $6.8 billion of that amount.

Although the proposed protections are good news for consumers, it's important to use gift cards wisely. Here are four tips:

1. Purchase discounted items, to maximize the gift card's value.
2. Use the total gift card amount all at once. Better to spend some money to go above the gift card amount than to have a gift card balance go unused.
3. Buy necessities. Don't waste the gift card on things that you don't really need. Instead, buy necessities that you otherwise might not have been able to afford.
4. Find creative solutions to "I don't care for that store" gift card dilemmas. For example, consider trading gift cards, donating the card to a charity, using the card to buy a gift for someone else, or re-gifting the card.

Sources:

Federal Reserve Board
http://www.federalreserve.gov/newsevents/press/bcreg/20091116a.htm

The Wall Street Journal
http://online.wsj.com/article/SB124605742408663533.html

Creditcards.com
http://www.creditcards.com/credit-card-news/gift-card-federal-reserve-regulations-1271.php

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