What Happens When a Gift Card Expires?

Gift cards offer a convenient way to give a present, letting recipients choose their desired item. A common concern is whether these cards expire, potentially leading to a loss of value. Understanding gift card expiration rules helps consumers maximize their card’s utility.

Federal Expiration Rules

Federal regulations establish a baseline for gift card expiration and associated fees. The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 sets guidelines for most retail and bank-issued gift cards. Under the CARD Act, gift cards cannot expire in less than five years from activation or the last fund load. This ensures a reasonable period for consumers to use their balances.

The CARD Act also addresses inactivity fees. An issuer cannot charge an inactivity fee unless there has been no activity on the card for at least one year. Only one such fee may be charged per calendar month. These fees and any expiration dates must be clearly disclosed on the card or its packaging prior to purchase.

Federal rules apply broadly to store and restaurant gift cards, and to bank-issued gift cards with payment network logos like Visa or Mastercard. These regulations provide consumer protection, ensuring most gift cards maintain their value for a significant period and are not eroded by excessive fees.

State-Specific Expiration Laws

While federal law provides a minimum standard, many states have enacted stricter regulations. State laws can supersede federal law if they offer greater consumer protection. Thus, a gift card might be subject to more favorable terms based on the state where it was purchased or redeemed.

Some states prohibit expiration dates on gift cards entirely. Other states may extend the minimum expiration period beyond the federal five-year mandate, or ban inactivity fees altogether. For example, some states allow cash redemption of small remaining balances, a provision not universally mandated by federal law.

Consumers should be aware that the specific laws can vary significantly from state to state. Checking the regulations in their particular state is advisable, as these local laws can offer stronger protections than federal guidelines. This layered regulatory environment means that the actual terms of a gift card can depend on both federal and state statutes.

Different Types of Cards and Expiration

Not all cards that resemble gift cards are subject to the same expiration rules. Promotional or reward cards are often exempt from the federal and state gift card laws. These cards are typically given as a bonus or incentive, rather than being purchased with monetary value, and may have shorter expiration periods or specific usage conditions. For instance, a free bonus card received for making a purchase may expire much sooner than a gift card bought for its face value.

Store credit or merchandise credits also operate under different policies compared to traditional gift cards. These are often issued for product returns and their expiration terms are generally at the discretion of the retailer. Some store credits may not expire, while others might have a validity period determined by the issuing merchant. Unlike purchased gift cards, store credits are usually linked directly to a customer’s account and are not transferable.

Reloadable cards, such as prepaid debit cards, are distinct from gift cards and are regulated differently. While a physical prepaid card may have an expiration date printed on it, the underlying funds typically do not expire. If a prepaid card expires, the cardholder can usually request a replacement card to access the remaining balance, though some fees might apply for this service. These cards are often associated with major payment networks and can be used more broadly than retailer-specific gift cards.

Steps for Expired or Expiring Cards

When a gift card is nearing or has recently passed its expiration date, consumers can take several proactive steps. First, locate the card or digital information and review all terms and conditions, including the expiration date and any disclosed fees. Identify the remaining balance, often available through the issuer’s website or a toll-free number.

Contacting the card issuer directly is the next important action. Many gift card issuers have customer service departments that can assist with expired or expiring cards. Even if a card has technically expired, some issuers may offer an extension, re-issue a new card, or provide store credit, especially if the expiration was recent. When speaking with customer service, consumers can reference applicable federal and state protections if they believe their card falls under these laws.

It is advisable to document all communications with the issuer, including dates, times, names of representatives, and summaries of discussions. This record can be helpful if further action is needed. While federal law does not mandate replacement for lost or stolen gift cards, some issuers may still offer assistance. Understanding the specific type of card and the laws that apply to it can help guide the conversation with the issuer.