Alicia -- Here is the list of states that allow cash backs on gift certificates and prepaid cards: http://www.scripsmart.com/stat...
Here's the original FinCEN FAQ about prepaid access: http://www.fincen.gov/news_roo...
Note the sections about "closed-loop exemptions." Unless they qualify for the "closed-loop exemption," FinCEN considers prepaid card providers to be money services businesses, and they need to register as an MSB and comply with anti-money laundering and other requirements, which can be very onerous and expensive for a small business.
There is one other exemption for prepaid cards -- including "open loop" ones that can be redeemed for cash -- if the maximum limit on the card is less than $1,000, if they cannot be used internationally, and if they can't be exchanged between individual people (no peer-to-peer exchanges or transactions), and can't be reloaded. Each of these four requirements pretty much rule out virtual grid currencies.
