Gift cards cannot legally expire in less than five years under federal law, but expiration itself is not banned outright. The rules are more specific than most people realize, and knowing them can save you real money.
Americans load roughly $30 billion onto gift cards every year. An estimated $3 billion of that goes unredeemed. Expiration rules, inactivity fees, and retailer practices are exactly where that money disappears.
This article covers the federal five-year rule, what states add on top of it, how inactivity fees work, what happens to unused balances, and what your actual options are when a gift card has already expired.
Is It Illegal for Gift Cards to Expire
Gift cards are not completely banned from expiring, but it is illegal for a gift card to expire in less than five years from the date of purchase or the date funds were last loaded. Federal law sets this as a hard minimum floor.
The prohibition comes from the Credit CARD Act of 2009, which amended the Electronic Fund Transfer Act and added specific gift card protections at 15 USC 1693l-1. Before this law, retailers could set any expiration date they wanted. A gift card purchased in December might expire in March.
The five-year minimum applies to all general-purpose prepaid cards and most retail store gift cards sold in the United States. There are narrow exceptions, but the core rule covers the overwhelming majority of gift cards consumers encounter.
Quick Facts:
- Federal law: Credit CARD Act of 2009, codified at 15 USC 1693l-1
- Minimum expiration window: Five years from purchase or last load date
- Applies to: General-purpose prepaid cards and most retail gift cards
- Enforced by: Federal Trade Commission and Consumer Financial Protection Bureau
- State laws: Many states offer stronger protections than the federal minimum
The practical takeaway is that any gift card with an expiration date shorter than five years is violating federal law. That violation is actionable.
Is It Legal for Gift Cards to Expire
Yes, it is legal for gift cards to expire, but only after five years have passed since the date of purchase or the date funds were last loaded onto the card. Expiration itself is permitted. Early expiration is not.
This distinction matters enormously for consumers. The law does not treat a gift card like cash that never loses value. It treats it as a prepaid instrument with a legally protected minimum lifespan. After that five-year window closes, a retailer can allow the card to expire.
Some states go further and effectively ban expiration entirely by requiring unredeemed gift card balances to be turned over to the state as unclaimed property while giving consumers the right to reclaim those funds from the state indefinitely. In those states, the practical effect is that your money never truly disappears.
Legal vs Illegal Gift Card Expiration Scenarios:
| Scenario | Legal Status | Reason |
|---|---|---|
| Card expires 3 years after purchase | Illegal | Violates federal five-year minimum |
| Card expires exactly 5 years after purchase | Legal | Meets federal minimum |
| Card expires 7 years after purchase | Legal | Exceeds federal minimum |
| Card never expires | Legal | More protective than federal law requires |
| Card expires in 1 year (promotional exception) | Legal with disclosure | Narrow exception applies |
The promotional gift card exception is important. Gift cards issued as promotional awards, meaning cards given at no charge as part of a promotion rather than purchased, can have shorter expiration dates with proper disclosure.
Federal Gift Card Expiration Law
The federal gift card expiration law is found at 15 USC 1693l-1 of the Electronic Fund Transfer Act, added by Section 401 of the Credit CARD Act of 2009. The implementing regulations appear in Federal Reserve Regulation E, 12 CFR Part 1005, Subpart B.
This statute establishes two core protections for consumers. First, gift cards cannot expire in less than five years from the date of purchase or the date funds were last loaded. Second, inactivity fees cannot be charged until after twelve consecutive months of no activity, and only one fee per month is permitted.
The Federal Trade Commission and the Consumer Financial Protection Bureau share enforcement authority over these rules. Retailers who violate the expiration or fee provisions face civil penalties and enforcement actions.
Key Federal Gift Card Law Requirements:
| Requirement | Specific Rule | Statute Reference |
|---|---|---|
| Minimum expiration period | 5 years from purchase or last load | 15 USC 1693l-1(c) |
| Inactivity fee trigger | 12 consecutive months of no activity | 15 USC 1693l-1(b)(3) |
| Maximum inactivity fee frequency | One fee per month | 15 USC 1693l-1(b)(3) |
| Disclosure requirement | Expiration date and fees must be clearly disclosed | 15 USC 1693l-1(b)(5) |
| Promotional card exception | Shorter expiration permitted with disclosure | 15 USC 1693l-1(d) |
Bold Callout: The Credit CARD Act of 2009 applies to all gift cards sold on or after August 22, 2010. Cards purchased before that date may not have the same federal protections.
How Long Before a Gift Card Expires Legally
A gift card can legally expire no sooner than five years after the date of purchase or the most recent date funds were loaded onto it. This is the federal floor set by the Credit CARD Act of 2009.
The clock resets each time funds are added. If you purchase a gift card in January 2021 and add money to it in June 2024, the five-year minimum runs from June 2024, not January 2021. That extension mechanism is significant for reloadable gift cards.
State laws in many jurisdictions extend this window further or eliminate expiration entirely for practical purposes. A consumer in California, for example, benefits from state law that goes well beyond the federal five-year minimum.
Minimum Expiration Windows: Federal vs State Examples
| Jurisdiction | Minimum Expiration Window | Inactivity Fees Permitted | Source |
|---|---|---|---|
| Federal (all states) | 5 years from purchase or last load | After 12 months inactivity | 15 USC 1693l-1 |
| California | Gift cards generally cannot expire | Not applicable | California Civil Code 1749.5 |
| New York | 5 years minimum, strong fee limits | Restricted | NY General Business Law 396-i |
| Montana | Gift cards cannot expire | Not applicable | Montana Code 30-14-175 |
| Connecticut | 7 years minimum | Restricted | Connecticut General Statutes 42-460 |
| Maine | No expiration | Not applicable | Maine Revised Statutes 33-1957 |
The federal five-year rule is a floor, not a ceiling. States can and do require longer minimum periods or ban expiration entirely.
Key Takeaway: Federal law sets a five-year minimum expiration window for gift cards, and that clock resets with each new fund load. Many states go further, with several states effectively banning gift card expiration entirely under state consumer protection law.
Gift Card Expiration Laws by State
Gift card expiration laws vary significantly across states, with many states providing considerably stronger protections than the federal minimum. The variation creates a patchwork where a consumer’s rights depend heavily on which state they are in.
States in the strongest protection tier either ban gift card expiration outright or require retailers to honor expired cards indefinitely. California, Montana, Maine, and Washington are among the states with the most consumer-friendly rules. States in the middle tier require expiration windows longer than the federal five years or impose stricter fee limits. States in the baseline tier simply mirror federal requirements.
The state law that applies is generally the law of the state where the card was purchased or where the retailer is headquartered, though this can vary by state and card type.
Gift Card Expiration Laws: State-by-State Comparison
| State | Expiration Permitted | Minimum Window | Inactivity Fees | Key Statute |
|---|---|---|---|---|
| California | No (most cards) | Indefinite | Prohibited | Civil Code 1749.5 |
| Montana | No | Indefinite | Prohibited | Code 30-14-175 |
| Maine | No | Indefinite | Prohibited | Rev. Statutes 33-1957 |
| New York | Yes | 5 years minimum | Restricted | GBL 396-i |
| Connecticut | Yes | 7 years | Restricted | Gen. Statutes 42-460 |
| Washington | No (most cards) | Indefinite | Restricted | RCW 19.240 |
| All others | Yes | 5 years (federal) | After 12 months | 15 USC 1693l-1 |
Retailers operating nationally must comply with the strictest state law that applies to their customers. A retailer selling gift cards in California cannot legally allow those cards to expire under California law even if federal law would permit it after five years.
Can a Retailer Let a Gift Card Expire
A retailer can legally let a gift card expire, but only after the legally required minimum period has passed and only if proper disclosures were made at the time of sale. Letting a card expire before those conditions are met is a federal violation.
The retailer’s obligation does not end at simply waiting five years. The expiration date must be clearly disclosed on the card itself or on the packaging. A card that expires on a date not disclosed to the consumer at purchase violates federal law regardless of when the expiration occurs.
Retailers who operate in states with no-expiration rules face an additional layer of compliance. A retailer like Target or Starbucks that sells gift cards nationally must follow California’s no-expiration rule for California customers, which effectively means those cards cannot expire.
What Retailers Must Do Before Allowing a Gift Card to Expire:
- Wait at least five years from purchase or last fund load date
- Clearly disclose the expiration date on the card or packaging at time of sale
- Comply with applicable state law, which may be stricter than federal law
- Not charge inactivity fees before 12 consecutive months of inactivity
- Charge no more than one inactivity fee per month
Retailers who fail these requirements face FTC enforcement, state attorney general action, and potential class action lawsuits from consumers. The combination of those three enforcement channels creates real financial pressure on non-compliant retailers.
Do Gift Cards Have to Disclose Expiration Dates
Yes, gift cards are legally required to disclose expiration dates clearly and conspicuously. Federal law at 15 USC 1693l-1(b)(5) mandates that any expiration date applicable to the gift card funds must be clearly stated on the card or its packaging.
The disclosure requirement serves a practical purpose. A consumer who does not know a card expires cannot take steps to use it before expiration. Hidden or obscure expiration dates are a separate violation from the expiration itself.
The FTC has taken enforcement action against retailers for inadequate disclosures even when the underlying expiration date was technically legal. The disclosure rule is independently enforceable.
Gift Card Disclosure Requirements:
| Element | Requirement | Standard |
|---|---|---|
| Expiration date | Must be disclosed | Clearly and conspicuously |
| Inactivity fees | Must be disclosed | Including amount and trigger conditions |
| Location of disclosure | Card or packaging | Must be accessible before purchase |
| Font and visibility | Must be readable | Not buried in fine print |
| Online gift cards | Must be disclosed digitally | Same standard as physical cards |
Bold Callout: A gift card that charges fees or expires without clear prior disclosure violates federal law independently of whether the expiration date itself is legal. Disclosure failures are separately actionable violations.
Key Takeaway: Gift cards must clearly disclose expiration dates and all fees before purchase. A card with a legal expiration date that is not clearly disclosed still violates federal law. Retailers face enforcement from the FTC, state attorneys general, and civil lawsuits for disclosure failures.
Can Gift Cards Have Inactivity Fees
Gift cards can have inactivity fees under federal law, but those fees are subject to strict timing and frequency restrictions. The key rule is that no inactivity fee can be charged until the card has been completely unused for at least 12 consecutive months.
The 12-month trigger is a hard floor. A retailer cannot charge an inactivity fee after six months of no use, or after ten months. It must be a full twelve consecutive months of zero activity on the card before the first fee can apply.
After that 12-month trigger is reached, only one fee per month is permitted. A retailer cannot charge multiple monthly fees, cannot backdate fees, and cannot charge a fee that exceeds the remaining card balance.
Federal Inactivity Fee Rules:
| Rule | Requirement |
|---|---|
| Trigger period | 12 consecutive months of no activity |
| Maximum frequency | One fee per month |
| Fee must be disclosed | Yes, clearly before purchase |
| Fee cannot exceed balance | Yes, card cannot go negative |
| State law may be stricter | Yes, many states restrict or ban fees |
States like California ban inactivity fees on most gift cards entirely. A retailer selling gift cards in California cannot charge dormancy fees on those cards regardless of how long they go unused.
Are Gift Card Inactivity Fees Legal
Gift card inactivity fees are legal under federal law when they meet all applicable requirements, but they are illegal in several states and illegal at the federal level when the timing and disclosure rules are not followed.
The legality analysis has two layers. First, does federal law permit the fee? Yes, if the 12-month inactivity trigger has been reached, the fee was disclosed before purchase, and only one fee per month is charged. Second, does state law permit the fee? In California, Montana, Maine, and several other states, the answer is no regardless of federal permission.
The state law layer is where many retailers trip up. A retailer that follows federal rules precisely but operates in a state that bans inactivity fees has still violated the law. State law can be more protective than federal law and frequently is.
Inactivity Fee Legality by Jurisdiction:
| Jurisdiction | Inactivity Fees Permitted | Conditions | Source |
|---|---|---|---|
| Federal | Yes | After 12 months, one per month, disclosed | 15 USC 1693l-1 |
| California | No | Banned on most gift cards | Civil Code 1749.5 |
| Montana | No | Banned | Code 30-14-175 |
| Maine | No | Banned | Rev. Statutes 33-1957 |
| New York | Limited | Strict restrictions apply | GBL 396-i |
| Most other states | Yes | Subject to federal rules | 15 USC 1693l-1 |
Gift Card Fee Laws
Gift card fee laws at the federal level cover inactivity fees, dormancy fees, and service charges. They do not regulate every type of fee a retailer might charge, but they cover the most common fees that erode gift card balances.
Beyond inactivity fees, retailers may not charge fees for simply checking a balance, replacing a lost card, or processing a redemption unless those fees were clearly disclosed before purchase. The disclosure rule applies to all fees, not just inactivity fees.
The FTC has enforcement authority to pursue retailers who charge undisclosed fees or inactivity fees that do not meet the timing requirements. State consumer protection laws add another enforcement layer in most states.
Types of Gift Card Fees and Their Legal Status:
| Fee Type | Legal Status (Federal) | Disclosure Required | State Restrictions |
|---|---|---|---|
| Inactivity fee | Legal with conditions | Yes | Banned in several states |
| Dormancy fee | Legal with conditions (same as inactivity) | Yes | Banned in several states |
| Balance inquiry fee | Legal if disclosed | Yes | State law may restrict |
| Card replacement fee | Legal if disclosed | Yes | State law may restrict |
| Redemption fee | Legal if disclosed | Yes | State law may restrict |
| Monthly service fee | Legal if disclosed, after 12 months inactivity | Yes | Banned in several states |
Bold Callout: A retailer cannot charge an inactivity fee that exceeds the remaining balance on the card. A gift card balance cannot be driven negative by fees under federal law.
Key Takeaway: Federal law permits inactivity fees only after 12 consecutive months of no activity, at a maximum of one fee per month, with full prior disclosure. Several states ban these fees entirely. All fees, whether federally permitted or not, must be disclosed before purchase to comply with federal disclosure requirements.
What Happens to Unused Gift Card Balances
Unused gift card balances do not simply disappear when a card expires. Under state unclaimed property laws, those balances are typically required to be turned over to the state after a period of dormancy. Consumers can then claim that money from the state, often indefinitely.
This process is called escheatment. It is a legal mechanism that exists in all 50 states requiring businesses to transfer unclaimed property, including unused gift card balances, to the state after a specified dormancy period. The state holds those funds as custodian.
The practical significance is enormous. A gift card that appears to have expired with a remaining balance may actually have had that balance transferred to a state unclaimed property fund. The consumer may be able to claim it back from the state even years later.
What Happens to Unused Gift Card Money:
- Card expires or goes dormant for the state-specified period
- Retailer is required to report and remit the balance to the state unclaimed property office
- State holds the funds as custodian
- Consumer can file a claim with the state to recover the balance
- In most states, the right to claim never expires
The state’s unclaimed property website is the place to check. Most states have searchable online databases where consumers can look up whether any unclaimed property is being held in their name.
Gift Card Escheatment Laws
Gift card escheatment laws are state unclaimed property statutes that require retailers to turn over unredeemed gift card balances to the state after a specified dormancy period. These laws exist in all 50 states and directly affect what happens to unused gift card money.
The dormancy period before escheatment kicks in varies by state, typically ranging from two to seven years of inactivity. After that period, the retailer must report the balance to the state and remit the funds. Failure to do so can result in significant penalties for retailers.
Not all states treat gift cards the same way under their escheatment laws. Some states exempt gift cards from escheatment entirely, which means the retailer keeps the balance rather than turning it over to the state. In those states, consumers have less recourse after a card expires.
Gift Card Escheatment Laws by State:
| State | Escheat Required | Dormancy Period | Consumer Claim Period |
|---|---|---|---|
| California | Yes | 3 years | Indefinite |
| New York | Yes | 5 years | Indefinite |
| Texas | Yes | 3 years | Indefinite |
| Delaware | Yes | 5 years | Indefinite |
| Florida | Yes | 5 years | Indefinite |
| Georgia | No (gift cards exempt) | Not applicable | Not applicable |
Retailers in states that exempt gift cards from escheatment keep the unredeemed balance as revenue. That revenue is sometimes called breakage. In states where escheatment applies, retailers must surrender those funds rather than keeping them.
Gift Card Expiration: California Law
California has some of the strongest gift card consumer protections in the United States. Under California Civil Code Section 1749.5, gift certificates and gift cards issued for consideration, meaning cards that consumers purchase, cannot expire and cannot have service fees deducted from them.
The practical effect of California Civil Code 1749.5 is that a gift card purchased in California or issued by a California-based retailer to a California customer never expires. A consumer who finds a 10-year-old California gift card in a drawer can legally present it for redemption.
California also requires retailers to redeem gift cards with a balance of less than $10 in cash upon request. That redemption right applies to any card with a sub-$10 balance regardless of how old it is.
California Gift Card Law Summary:
| Rule | California Law | Federal Law |
|---|---|---|
| Expiration permitted | No (for purchased cards) | Yes, after 5 years |
| Inactivity fees | Prohibited | After 12 months |
| Cash redemption right | Yes, for balances under $10 | No equivalent |
| Statute | Civil Code 1749.5 | 15 USC 1693l-1 |
Bold Callout: California Civil Code 1749.5 provides that a gift card issued for consideration cannot expire. California retailers who allow purchased gift cards to expire violate state law regardless of what the card’s printed terms say.
The promotional card exception applies in California too. Gift cards issued free as part of a promotion rather than sold to consumers can have expiration dates in California.
Gift Card Expiration: New York Law
New York gift card law is governed by New York General Business Law Section 396-i, which provides consumer protections that go beyond the federal minimum in several respects. New York requires a minimum five-year expiration window but adds strong fee restrictions on top of that.
Under New York General Business Law 396-i, gift cards issued for consideration must remain valid for at least five years from the date of issuance. Service fees, including inactivity or dormancy fees, are prohibited during the first two years of a card’s life regardless of activity level. After that two-year period, fees remain restricted to those permitted under federal law.
New York also requires that any expiration date be printed clearly on the gift card itself, not just on packaging that might be discarded. That on-card disclosure requirement is more specific than the federal standard.
New York Gift Card Law vs Federal Law:
| Rule | New York Law | Federal Law |
|---|---|---|
| Minimum expiration | 5 years | 5 years |
| Fee prohibition period | 2 years from issuance | No equivalent (12-month inactivity trigger) |
| Disclosure location | Must be on the card | Card or packaging |
| Statute | GBL Section 396-i | 15 USC 1693l-1 |
New York’s two-year fee-free period is the key distinction from federal law. Federally, an inactivity fee can apply after 12 months of no use. In New York, no fee can apply in the first 24 months regardless of inactivity.
What Are My Rights If My Gift Card Expired
If your gift card expired, your rights depend on when it expired, what state you are in, and whether the retailer followed all legal requirements. Federal law provides a foundation, and state law may provide additional protections.
If the card expired before five years from purchase, the retailer violated federal law and you are entitled to the full balance. Contact the retailer directly and reference the five-year minimum requirement under 15 USC 1693l-1. If the retailer refuses, you can file a complaint with the FTC and your state attorney general.
If the card expired after the legally required minimum period with proper disclosures, the retailer complied with the law. In that case, check whether your state has unclaimed property rules that may allow you to claim the balance from the state’s unclaimed property office.
Rights by Scenario:
| Scenario | Your Rights | Action to Take |
|---|---|---|
| Card expired before 5 years | Full balance owed, federal violation | Contact retailer, file FTC complaint |
| Card expired without disclosure | Full balance owed, disclosure violation | Contact retailer, file FTC complaint |
| Card expired legally, state escheat applies | Claim from state unclaimed property | Check state unclaimed property database |
| California card, any expiration | Full balance still owed (no expiration legal) | Contact retailer, reference Civil Code 1749.5 |
| Card expired legally, no escheat | Limited recourse | Retailer discretion, goodwill policy |
Always start with the retailer’s customer service. Many major retailers, including Amazon, Target, and Starbucks, have policies of honoring expired gift cards as a goodwill gesture even when they are not legally required to do so.
Can You Get Money Back on an Expired Gift Card
You can get money back on an expired gift card in many situations, either through legal entitlement, state unclaimed property claims, or retailer goodwill policies. The approach that works depends on the specific circumstances of your expired card.
If the card expired in violation of federal or state law, you have a legal right to the balance. That right is enforceable through a direct complaint to the retailer, a complaint to the FTC, a complaint to your state attorney general, or a small claims court action for the balance amount.
If the expiration was legal, your best practical step is to contact the retailer directly. Many national retailers have policies that extend courtesy replacements or credits to customers with recently expired cards regardless of legal obligation. The request costs nothing and frequently succeeds.
How to Get Money Back on an Expired Gift Card:
| Step | What to Do | When It Works |
|---|---|---|
| Contact retailer | Request balance or replacement | Almost always worth trying |
| Cite federal law | Reference 5-year minimum if applicable | When card expired before 5 years |
| Cite state law | Reference your state’s gift card law | In states with stronger protections |
| Check state unclaimed property | Search state database for your balance | When state escheat applies |
| File FTC complaint | Formal complaint at ftc.gov | When retailer refuses legal obligation |
| State attorney general | File consumer complaint | When retailer refuses legal obligation |
| Small claims court | Sue for the balance | Last resort for larger balances |
Bold Callout: Americans can search for unclaimed property from expired gift cards and other sources at their state’s official unclaimed property database. Many states have hundreds of millions of dollars in unclaimed property waiting to be claimed.
Frequently Asked Questions
Is it illegal for a gift card to expire in less than five years?
Yes, it is illegal under federal law for a gift card to expire in less than five years from the date of purchase or the most recent date funds were loaded.
The Credit CARD Act of 2009 established this five-year minimum at 15 USC 1693l-1.
A gift card that expires in three years, two years, or one year violates federal law regardless of what is printed on the card.
If your card expired before five years, you are legally entitled to the remaining balance and can file a complaint with the FTC if the retailer refuses.
Can a retailer charge inactivity fees on a gift card?
Yes, retailers can charge inactivity fees under federal law, but only after 12 consecutive months of no activity on the card.
Only one inactivity fee per month is permitted, and all fees must be clearly disclosed before purchase.
Several states, including California, Montana, and Maine, ban inactivity fees on gift cards entirely regardless of federal permission.
A fee charged before the 12-month inactivity trigger violates federal law, and you can file a complaint with the FTC to recover those improperly charged amounts.
What happens to the money on a gift card that expires?
When a gift card expires, the remaining balance does not automatically disappear.
In most states, retailers are required to turn unredeemed gift card balances over to the state as unclaimed property after a dormancy period of two to seven years.
Consumers can then claim those funds from the state’s unclaimed property office, often indefinitely.
In states that exempt gift cards from escheatment, the retailer keeps the balance as revenue, which is called breakage income.
Which states have the strongest gift card expiration protections?
California, Montana, and Maine have the strongest gift card expiration protections in the United States.
California Civil Code 1749.5 prohibits expiration and inactivity fees on purchased gift cards, and California law requires retailers to redeem cards with balances under $10 in cash.
Montana and Maine similarly prohibit gift card expiration for cards sold to consumers.
Washington and Connecticut also offer protections stronger than the federal minimum, with no-expiration rules and fee restrictions that go beyond what federal law requires.
Can you get a refund or replacement for an expired gift card?
You can often get a refund or replacement for an expired gift card, through legal entitlement or retailer goodwill depending on the circumstances.
If the card expired before the legally required minimum period or without proper disclosure, you have a legal right to the balance and can demand it from the retailer or file an FTC complaint.
If the expiration was legal, contacting the retailer directly is the best first step because many major retailers have goodwill policies that honor recently expired cards.
You can also check your state’s unclaimed property database to see if the balance was esheated to the state, which you can then claim.
Closing
Gift card expiration law is more protective of consumers than most people realize, and knowing the five-year federal minimum, your state’s specific rules, and the unclaimed property option puts you in a far stronger position than simply accepting a zero balance.
Bookmark this article before your next gift card purchase and share it with anyone who has an old card sitting in a drawer. The money may be legally yours to claim, and knowing that in 2026 is worth the five minutes it takes to check
