How Much Can You Put on a Gift Card?

Gift cards are a popular and convenient method for giving and receiving funds. They have limitations regarding the value they can hold. Understanding these limits is important for consumers and businesses, as the maximum value is influenced by issuer policies, regulatory requirements, and tax considerations.

Maximum Values Set by Issuers

The practical limits on gift card values are primarily determined by individual issuers and can vary significantly. Gift cards generally fall into two categories: closed-loop and open-loop. Closed-loop cards are specific to a single merchant or group of merchants, such as a retail store or restaurant chain, and can only be used within that network. Open-loop cards are branded by major payment networks like Visa, Mastercard, or American Express, and function much like debit cards, accepted wherever that network’s cards are processed.

Typical maximum load limits for open-loop gift cards often range from $500 to $2,000, though some may allow up to $5,000. Closed-loop store-specific cards also vary widely, with some having limits of a few hundred dollars and others permitting values up to $2,000 or $5,000. Issuers set these limits for several reasons. Higher values can increase the risk of fraud, making smaller denominations simpler to manage from an operational perspective.

Issuers also consider consumer protection, as limiting the value reduces potential losses for the cardholder if a card is lost or stolen. These commercial limits are often established with an awareness of regulatory thresholds to avoid triggering additional compliance obligations. It is advisable to review the terms and conditions provided by the issuer or retailer to find the maximum value.

Regulatory Thresholds and Anti-Money Laundering

Government regulations, particularly those aimed at combating money laundering, significantly influence the practical thresholds for gift card values. High-value gift cards can be categorized as “monetary instruments,” which subjects them to certain reporting requirements under federal law. The Bank Secrecy Act (BSA) requires financial institutions to assist government agencies in detecting and preventing money laundering.

Under the BSA, financial institutions, including some gift card issuers or retailers acting as financial agents, must file a Currency Transaction Report (CTR) with the Financial Crimes Enforcement Network (FinCEN) for cash transactions exceeding $10,000 in a single business day. This means that large cash purchases of gift cards can trigger a CTR. Additionally, regardless of the amount, any transaction deemed suspicious may lead to the filing of a Suspicious Activity Report (SAR). This includes instances where individuals attempt to “structure” transactions, breaking up large purchases into smaller amounts to evade the $10,000 reporting threshold.

These regulatory mandates compel gift card issuers to implement measures such as lower maximum load limits or Know Your Customer (KYC) procedures, like requiring identification for larger gift card purchases. For instance, FinCEN’s Prepaid Access Rule exempts closed-loop products from certain anti-money laundering program requirements if the maximum daily load or reload is under $2,000 per product. However, it prohibits retailers from selling gift cards exceeding $10,000 to any one person in a single day unless they have established policies to prevent such sales. While no direct federal law sets a universal maximum value for all gift cards, these reporting requirements create practical upper limits for anonymous or easily acquired high-value cards.

Tax Implications of High-Value Gift Cards

High-value gift cards can have tax implications for both the giver and the recipient, depending on the nature of the gift. For individuals, the Internal Revenue Service (IRS) has specific rules regarding gift tax. The annual gift tax exclusion allows a person to give a certain amount to any individual recipient within a calendar year without incurring gift tax or requiring a gift tax return (IRS Form 709). For 2025, this annual exclusion amount is $19,000 per recipient.

If a gift card’s value exceeds this annual exclusion amount to a single recipient in a year, the giver must file Form 709 to report the gift. The amount exceeding the annual exclusion will then count against the giver’s lifetime gift tax exclusion. The recipient of a gift, including a gift card, does not pay income tax on the gift itself.

When gift cards are provided by an employer to an employee, they are considered taxable income to the employee, regardless of the amount. This applies to gift cards given for any reason, such as holidays, performance bonuses, or other recognition. These amounts are subject to income tax withholding and payroll taxes, and must be included in the employee’s wages on their Form W-2. Unlike certain small, infrequent items of nominal value that might qualify as “de minimis” fringe benefits, gift cards are considered cash equivalents by the IRS and therefore do not qualify for this exclusion. Businesses can deduct the cost of gift cards given to employees as compensation, and those given to clients or customers may be deductible as business expenses, subject to certain limits for business gifts.