When Does a Gift Card Expire? A Look at Current Laws

Gift cards are a popular choice, offering convenience and flexibility. Many wonder about their lifespan and whether their value can disappear. Expiration rules are shaped by federal and state regulations. Understanding these provisions helps consumers maximize card value.

Federal Law on Expiration

Federal regulations, primarily the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, establish a baseline for gift card expiration and fees. This law mandates gift cards cannot expire less than five years from activation or last fund addition. The CARD Act also addresses dormancy or inactivity fees, prohibiting charges unless the card has been been inactive for at least 12 months. After this period, fees can only be charged once per calendar month, and terms must be clearly disclosed. These federal rules protect against rapid expiration and hidden charges.

State Law Variations

While federal law sets minimum standards, many states offer additional gift card safeguards. State laws often provide stronger protections than federal requirements regarding expiration and fees. Some state laws may prohibit expiration dates entirely, allowing card value to remain indefinitely.

Other states might mandate a longer minimum expiration period, such as seven years, surpassing the federal five-year rule. State laws can also impose stricter limitations or outright prohibitions on dormancy or inactivity fees. When a state law provides greater consumer protection, the more protective state law takes precedence.

Understanding Different Gift Card Types

Not all cards resembling traditional gift cards are subject to the same federal and state regulations. Promotional or reward cards, often given as bonuses or loyalty incentives, are exempt and may have shorter expiration periods or no cash value. Reloadable prepaid cards, not primarily marketed as gift cards, function more like debit cards with different fee structures and expiration terms. Cards issued as part of a loyalty program or as merchandise credit also operate under specific terms. Gift cards for a specific number of services, like a spa package, might have an expiration tied to the service itself rather than a monetary value.

Practical Steps for Consumers

Consumers can take several steps to determine gift card expiration and address issues. Examine the back of the card for expiration dates and fee details. If information is unclear, check the issuer’s website for terms and conditions. Contacting the gift card issuer’s customer service department is another effective way to inquire about expiration dates or dormancy fees.

If a consumer believes a card has expired unfairly or excessive fees have been charged, they can contact their state attorney general’s office for guidance. The Consumer Financial Protection Bureau (CFPB) also accepts complaints regarding financial products, including gift cards. Consumers are advised to use gift cards promptly and consider registering them with the issuer for added protection against loss or theft.