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National Restaurant Association - What new gift card regulations mean for you

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What new gift card regulations mean for you

Enforcement of a new rule on prepaid gift cards is set to begin March 31.

Last summer, the Financial Crimes Enforcement Network released a new rule covering prepaid gift cards to prevent money laundering. FinCEN Administrative Notice 2011-3 requires companies that sell certain pre-paid gift cards to collect, verify and maintain cardpurchaser information for at least five years, among other requirements.

Unless your business falls under certain exemptions, your restaurant could be required to meet the rule's anti-money laundering requirements.

Exceptions include closed loop programs that meet certain requirements, such as allowing no more than $2,000 to be loaded on a card in a single day.    

Similarly, a limited open loop exclusion exists for programs that allow individual cards to be loaded with no more than $1,000 maximum value, and from which not more than $1,000 can be initially or subsequently loaded, used or withdrawn on any given day. 

This type of program is exempt from the new requirements if it prohibits funds to be transmitted internationally, person-to-person transfers within the program and deposits from non-depository sources. 

Both exemptions require that no more than $10,000 in total sales of any type of card be allowed to an individual purchaser in a single day.

Proper implementation of the exemptions to the new rule is critical to avoid the  AML requirements. The National Restaurant Association has partnered with gift card experts Card Compliant to help you better understand the changes and the impact on your gift card program.

This information was provided by Card Compliant. For more information contact Wally Brabec, client services manager, Card Compliant, at (913) 871-7455.    


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