🇺🇸 Gift Card Laws in the United States

Section 1 — Federal Law: The CARD Act of 2009

The Credit CARD Act of 2009 (Public Law 111-24), specifically Section 915, established the first federal protections for gift card consumers in the United States. Before this law, issuers could impose expiration dates as short as one year and charge fees with little disclosure. The CARD Act changed that dramatically.

The Act is implemented through regulations issued by the Consumer Financial Protection Bureau (CFPB), specifically Regulation E (12 CFR Part 1005) and the Federal Reserve's Regulation E amendments.

The 5-Year Minimum Validity Rule

Gift cards covered by the CARD Act must remain valid for at least 5 years from the date of purchase, or from the date funds were last loaded or reloaded. This means:

• If you receive a $50 gift card today, you have at least 5 years to use it before the issuer can consider it "expired."
• If you add $25 to a reloadable card, the 5-year clock restarts from that reload date.
• Even if the printed expiration date on the card face has passed, federal law may still protect the underlying balance.

Inactivity Fee Rules

Inactivity fees (also called dormancy fees or service fees) are strictly regulated. Under the CARD Act:

• No inactivity fees may be charged during the first 12 consecutive months of inactivity.
• After 12 months of inactivity, only one fee may be charged per month.
• The fee amount must be disclosed clearly on the card packaging before purchase.
• The issuer may not charge more than one type of fee per month.

Disclosure Requirements

Before you purchase a covered gift card, all fees, terms, and the expiration date must be clearly disclosed. The disclosure must appear on or with the card, not buried in fine print on a separate document. If fees are not disclosed, the issuer may not be able to legally collect them.

Which Cards Are Covered

The CARD Act covers gift cards and gift certificates sold in a retail establishment or online that may be used to purchase goods or services. This includes both open-loop and closed-loop cards sold after August 22, 2010.

Section 2 — Exempt Cards Under Federal Law

Not all prepaid cards are covered by the CARD Act's gift card protections. The following are exempt:

• Reloadable cards not marketed as gift cards: General-purpose reloadable prepaid cards marketed primarily as alternatives to bank accounts.
• Loyalty program cards: Cards issued as part of a loyalty, award, or promotional program where the value was not purchased (e.g., points-based reward cards).
• Telephone cards: Cards used to purchase prepaid telephone calling time.
• Cards where all fees are disclosed and the purchaser selects the terms: Some limited exceptions for cards where consumers explicitly choose a shorter validity period in exchange for lower cost.

These exemptions exist because the policy rationale for protecting purchased gift cards (where a consumer has spent money expecting a minimum period of use) differs from loyalty rewards or alternative banking products.

Section 3 — State Laws (Overview)

Individual states often provide protections that exceed the federal minimum. State attorney general offices enforce these rules, and consumers can file complaints at the state level for violations.

States with stronger expiration protections: Several states, including California, Connecticut, Maine, Massachusetts, Montana, New Hampshire, New Jersey, Rhode Island, Vermont, and Washington, have enacted laws that restrict or ban expiration dates entirely on many gift cards.

States requiring cash-out of small balances: California, Colorado, Maine, Massachusetts, Montana, Oregon, Texas, Vermont, and Washington state require retailers to refund gift card balances below a threshold (typically $5–$10) in cash upon request.

Gift card escheatment laws: Each state has its own unclaimed property law specifying when dormant gift card balances must be reported to the state. The dormancy period varies from 1 to 7 years depending on the state. Once escheated, you can file a claim through your state's unclaimed property office.

Important note: Whether your state's law or federal law applies may depend on where you purchased the card and where the issuer is incorporated. This is a complex legal area; consult your state attorney general's office or a consumer law attorney for specific advice.

Section 4 — Consumer Rights Checklist

• Your gift card must remain valid for at least 5 years from the date of purchase (cards sold after August 22, 2010)
• You must be told about all fees before purchasing — on the card packaging or accompanying materials
• No inactivity fee may be charged during the first 12 consecutive months of non-use
• Only one fee type per month may be charged after the 12-month inactivity period
• You have the right to know your remaining balance at any time (website, phone, or in-store)
• If the card's printed expiration date has passed but the 5-year protection period has not, the issuer must maintain the balance or provide access to it
• In several states, you can request a cash refund for balances below $5–$10
• You can file a complaint with the CFPB if you believe your rights have been violated

Section 5 — How to File a Complaint

Who regulates gift cards in the US: The Consumer Financial Protection Bureau (CFPB) has primary federal jurisdiction over gift card rules. State attorneys general enforce state-level consumer protection laws. The Federal Trade Commission (FTC) handles fraud and deceptive practices.

Before filing, gather: Your gift card, original packaging, purchase receipt, any correspondence with the issuer, documentation of fees charged or problems encountered, and a written timeline of events.

Where to file:

• CFPB: ConsumerFinance.gov — for fee disputes, expiration issues, and CARD Act violations
• FTC: ReportFraud.ftc.gov — for fraud, scams, and deceptive practices
• State Attorney General: Search "[Your State] Attorney General Consumer Protection" — for state law violations
• BBB: BBB.org — for general merchant disputes (not a government agency)

Typical resolution timelines: Government complaints are logged and may take weeks to months to receive a response. They often result in general enforcement actions rather than individual refunds. For personal refunds, contact the card issuer's customer service directly first.

Section 6 — Common Situations & What the Law Says