Can Gift Cards Expire? What the Law Says
Understand gift card expiration dates, fees, and your consumer rights. Learn what federal and state laws protect your card's value.
Gift cards are a popular and convenient form of payment. They offer flexibility, allowing recipients to choose desired items from a specific retailer or network of stores. A common concern for consumers is the potential for these cards to expire, leading to confusion and loss of value. Understanding regulations surrounding gift card expiration and associated fees is important for maximizing their utility and protecting consumer funds.
Federal Gift Card Expiration Rules
Federal regulations provide a baseline for gift card expiration through the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This law mandates that most retail and bank-issued gift cards cannot expire less than five years from their issue date or the last date funds were added to a reloadable card. This prevents consumers from losing gift card value due to short expiration periods.
The CARD Act applies to store-branded gift cards, redeemable at a single merchant or affiliated group, and general-use gift cards, such as those with payment network logos like Visa or Mastercard. Certain exceptions apply, including reloadable cards not marketed as gift cards, promotional cards, paper gift certificates, cards solely for telephone services, or cards for specific events without a stated monetary value.
State-Specific Protections
While federal law establishes a minimum five-year expiration period, many states have enacted their own regulations offering greater consumer protections. These state laws can supersede or add to federal requirements, providing additional safeguards. Some states prohibit expiration dates altogether on certain gift cards.
Other states might mandate longer expiration periods than the federal five-year minimum, or impose stricter rules regarding expiration date disclosure. These varied state laws mean a gift card’s terms can depend on where it was purchased or issued.
Understanding Fees and Deductions
Beyond expiration dates, gift cards can be subject to fees that reduce their value, such as dormancy, inactivity, and service fees. Federal law, specifically the CARD Act, limits when these fees can be charged. An issuer cannot impose such a fee unless there has been no activity on the card for at least 12 consecutive months.
Even after this 12-month period, only one fee may be assessed per calendar month. Any potential fees must be clearly disclosed to the consumer before purchase. State laws can further restrict or prohibit these fees, providing additional consumer protection. Some states might allow fees only under specific circumstances, such as when a card’s remaining value falls below a certain threshold.
Practical Steps for Cardholders
To safeguard gift card value, cardholders should check the balance, expiration dates, and fees promptly upon receipt. This information is typically found on the card’s back, a sticker, or within the packaging, often with a toll-free number or website for inquiries.
If a card has an expiration date, use it well before that date to avoid losing value. For questions or issues, contact the card issuer directly. If a gift card remains unredeemed for an extended period, or if the issuer goes out of business, the balance may be subject to unclaimed property laws, also known as escheatment. These laws vary by state and govern how unredeemed funds transfer to state control, often after a two to five-year dormancy period.
Gift cards are a popular and convenient form of payment. They offer flexibility, allowing recipients to choose desired items from a specific retailer or network of stores. A common concern for consumers is the potential for these cards to expire, leading to confusion and loss of value. Understanding regulations surrounding gift card expiration and associated fees is important for maximizing their utility and protecting consumer funds.
Federal Gift Card Expiration Rules
Federal regulations provide a baseline for gift card expiration through the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009. This law mandates that most retail and bank-issued gift cards cannot expire less than five years from their issue date or the last date funds were added to a reloadable card. This prevents consumers from losing gift card value due to short expiration periods.
The CARD Act applies to store-branded gift cards, redeemable at a single merchant or affiliated group, and general-use gift cards, such as those with payment network logos like Visa or Mastercard. Certain exceptions apply, including reloadable cards not marketed as gift cards, promotional cards, paper gift certificates, cards solely for telephone services, or cards for specific events without a stated monetary value.
State-Specific Protections
While federal law establishes a minimum five-year expiration period, many states have enacted their own regulations offering greater consumer protections. These state laws can supersede or add to federal requirements, providing additional safeguards. Some states prohibit expiration dates altogether on certain gift cards.
Other states might mandate longer expiration periods than the federal five-year minimum, or impose stricter rules regarding expiration date disclosure. These varied state laws mean a gift card’s terms can depend on where it was purchased or issued.
Understanding Fees and Deductions
Beyond expiration dates, gift cards can be subject to fees that reduce their value, such as dormancy, inactivity, and service fees. Federal law, specifically the CARD Act, limits when these fees can be charged. An issuer cannot impose such a fee unless there has been no activity on the card for at least 12 consecutive months.
Even after this 12-month period, only one fee may be assessed per calendar month. Any potential fees must be clearly disclosed to the consumer before purchase. State laws can further restrict or prohibit these fees, providing additional consumer protection. Some states might allow fees only under specific circumstances, such as when a card’s remaining value falls below a certain threshold.
Practical Steps for Cardholders
To safeguard gift card value, cardholders should check the balance, expiration dates, and fees promptly upon receipt. This information is typically found on the card’s back, a sticker, or within the packaging, often with a toll-free number or website for inquiries.
If a card has an expiration date, use it well before that date to avoid losing value. For questions or issues, contact the card issuer directly. If a gift card remains unredeemed for an extended period, or if the issuer goes out of business, the balance may be subject to unclaimed property laws, also known as escheatment. These laws vary by state and govern how unredeemed funds transfer to state control, often after a two to five-year dormancy period.