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- Gift cards must last at least five years under federal law.
- Inactivity fees can only be charged after one year of no activity.
- State laws may offer additional protections beyond federal rules.
- Store-specific gift cards may have different expiration rules than general-use cards.
- General-use prepaid cards can be reloaded and used indefinitely if there are funds.
- Expiration dates and fees must be clearly disclosed on the card or at the point of sale.
- Digital gift cards follow the same expiration rules as physical gift cards.
- To avoid inactivity fees, use the card within the first year after receiving it.
How Long Do Gift Cards Last?
Gift cards are a popular way to give gifts, offering flexibility for the recipient to choose their desired items or experiences. But one common question many people have is: how long do gift cards last? The answer isn’t as simple as it seems, as it depends on various factors like federal and state laws, the type of card, and any fees attached.
In this blog post, we will break down everything you need to know about the lifespan of gift cards, from expiration dates to inactivity fees, and the laws that protect consumers.
Federal Laws That Govern Gift Cards
The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 is the key piece of federal legislation that impacts how long gift cards last. This law established certain protections for consumers, including restrictions on gift card expiration dates and fees.
Gift Card Expiration Dates
Under federal law, most gift cards cannot expire within five years from the date of purchase or the last time money was added to the card. This means that if you buy a gift card, the recipient has at least five years to use it before it becomes invalid.
However, this only applies to general-use gift cards like those from major credit card companies such as Visa, MasterCard, or American Express. If the card is a specific store or brand card, it may have different rules that we’ll discuss later.
Inactivity and Dormancy Fees
The CARD Act also limits the fees that can be charged on gift cards. Inactivity fees, also known as dormancy fees, can only be charged if there has been no activity on the card for at least one year. These fees are generally small and are meant to cover the administrative cost of maintaining the card after long periods of inactivity.
For example, if you receive a gift card and do not use it for a year, the issuer may charge a fee each month until the balance is depleted or the card is used. However, these fees can only be applied after a full year of no activity. Additionally, the fees must be disclosed on the card or at the point of sale.
State Laws and Gift Cards
While federal law sets the minimum standard for gift cards, some states have additional protections or rules that go beyond those requirements. These laws vary from state to state, but here are some common protections:
Extended Expiration Dates
Some states, like California, have laws that extend the expiration date on gift cards beyond the five-year federal minimum. In these states, certain types of gift cards cannot expire at all, or they can only expire under very specific circumstances.
For example, in California, gift cards with a balance of less than $10 cannot expire, and fees are generally not allowed on these cards. Other states, like New York, offer similar protections to prevent fees from being charged after a period of inactivity.
Additional Consumer Protections
Other states may require that gift card expiration dates and fee information be more prominently displayed on the card or at the point of sale. Some states may even require that the seller provide the card’s balance, expiration date, and fee information in writing at the time of purchase.
It’s important to check your state’s specific regulations when you buy or use a gift card, as some states offer more robust protections than others.
How Long Do Different Types of Gift Cards Last?
Now that we’ve covered the general rules about expiration dates and fees, let’s take a closer look at the different types of gift cards and how long they last.
General-Use Prepaid Cards
These are the most common type of gift card and are usually issued by major payment networks like Visa, MasterCard, or American Express. These cards can be used anywhere that accepts the brand, and they are typically reloadable, meaning you can add funds to them as needed.
Under federal law, general-use prepaid cards must remain active for at least five years from the purchase date or the last time funds were added. If the card has no balance, it may become inactive, but you can usually reload it to keep it active.
Store-Specific Gift Cards
Store-specific gift cards, like those for major retailers such as Amazon, Target, or Starbucks, often have different rules regarding expiration dates. These cards may still be subject to the five-year minimum under federal law, but in some cases, the retailer may impose their own expiration date.
For instance, a Starbucks card may expire after a certain number of years, but if there is a balance on the card, you will still be able to use it for purchases even after the expiration date has passed. However, it’s essential to review the terms and conditions of each card when purchasing to know the specifics of when it may expire.
Digital Gift Cards
Digital gift cards are becoming increasingly popular, especially with the rise of online shopping. These cards typically come in the form of an email or a mobile app and can be used for online purchases.
Digital gift cards are generally treated the same as physical store-specific gift cards or general-use prepaid cards under federal law. They are subject to the five-year expiration rule. However, some digital gift cards may offer the option to reload funds or extend their validity, particularly if they are tied to an online account.
Disclosure of Expiration Dates and Fees
One important thing to note is that any expiration date or fee policy associated with a gift card must be clearly disclosed either on the card itself or at the point of sale. This transparency is required by law to ensure that consumers know the terms before they purchase the card.
When you purchase a gift card, you should look for the following information:
- Expiration date: The date after which the card will no longer be valid.
- Fee information: If there are any fees associated with the card, such as inactivity or dormancy fees, these should be clearly stated.
If the expiration date or fee structure is not disclosed, it may be illegal to enforce the terms. Be sure to read all the fine print before buying or using a gift card.
General Recommendations for Gift Card Use
To make the most of your gift card, here are a few tips:
- Use it soon: While federal law gives you five years to use the card, it’s best to use it within the first year to avoid the risk of inactivity fees.
- Keep track of your balance: Some cards may have a small balance left after a purchase, so make sure to check the balance before throwing it away or forgetting about it.
- Reload when possible: If your gift card is reloadable, adding funds can keep it active indefinitely as long as the card is used.
- Know your rights: If you’re unsure about your state’s specific gift card laws, do some research to ensure that you’re aware of your rights as a consumer.
Frequently Asked Questions
Here are some of the related questions people also ask:
How long do gift cards last before they expire?
Most gift cards are required by federal law to last at least five years from the purchase date or the last time funds were added.
Can a gift card expire sooner than five years?
Yes, some store-specific gift cards may have expiration dates shorter than five years, but general-use prepaid cards cannot expire before five years under federal law.
What is an inactivity fee on a gift card?
An inactivity fee is charged if there has been no activity on the card for at least one year. These fees are typically small and can only be applied after one year of no use.
Do all states have the same gift card rules?
No, some states have additional consumer protections that extend expiration dates or limit inactivity fees beyond federal requirements.
Can you reload a gift card?
General-use prepaid cards are typically reloadable, meaning you can add more funds to the card and keep it active indefinitely.
How can I avoid inactivity fees on a gift card?
To avoid inactivity fees, use the card within the first year after receiving it, or make sure to reload it with more funds if it’s a reloadable card.
Are there any gift cards that never expire?
Some states, like California, have laws that prevent certain gift cards, especially those with balances under $10, from ever expiring.
Can I check the balance of my gift card?
Yes, most gift card issuers allow you to check the balance online or by calling customer service.
Do gift cards for online stores have expiration dates?
Yes, digital gift cards are generally subject to the same rules as physical gift cards, including a five-year minimum expiration period under federal law.
The Bottom Line
To summarize, the general answer to the question, how long do gift cards last, depends on several factors. Under federal law, most gift cards are required to last at least five years from the date of purchase or the last time funds were added. Inactivity fees cannot be charged until at least one year of inactivity, and these fees must be disclosed in advance.
State laws may provide additional protections, extending the expiration date or limiting fees further. General-use prepaid cards have the most flexibility and can last indefinitely as long as there is money on the card and it is kept active.
By understanding the rules and protections surrounding gift cards, you can make sure your gift doesn’t lose value over time. Just remember to use your card, keep track of its balance, and read the fine print to avoid surprises.