Federal law limits when gift card money can expire and when fees can nibble at it. Some cards aren’t covered, and scammers love gift cards.
What to remember
- Gift card money can’t expire within five years of the date the card was activated or money was last loaded.
- Inactivity and service fees are only allowed after a year without use, and only one fee a month.
- Many states add stronger protections, and some ban expiration dates altogether.
- Anyone who demands payment by gift card is a scammer.
Gift cards are an easy present for kids, teachers and relatives. Since 2010, a federal law has given them some basic protections, set out in the Credit Card Accountability Responsibility and Disclosure Act and its rules.
The five-year rule
The money on a covered gift card can’t expire sooner than five years after the card was issued or the last time money was added to it. If there’s an expiration date, it has to be disclosed on the card.
Limits on fees
A card can charge inactivity, dormancy or service fees only if:
- there’s been no activity on the card for at least 12 months
- no more than one such fee is charged in a month
- the fees were clearly disclosed before you bought the card
Which cards are covered
The federal rules cover store gift cards, cards that can be used at a group of affiliated stores, and network-branded gift cards that work wherever that card network is accepted.
They don’t cover:
- reloadable prepaid cards that aren’t marketed as gift cards
- loyalty, award and promotional cards
- paper gift certificates
State laws can add more
Many states have their own gift card laws, and some go further than the federal rules. California, for example, generally bans expiration dates on gift cards. Your state attorney general’s office can tell you what applies to you.
Parent tip: Keep the receipt with the card and write the card number down somewhere safe. Some issuers can replace a lost or stolen card if you have proof of purchase.
How to spot a gift card scam
Scammers like gift cards because the money is hard to trace and hard to get back. They may pose as a government agency, a utility, a tech support company or a relative in trouble, and tell you to buy gift cards and read out the numbers.
Safety alert: Government agencies and real businesses don’t ask you to pay with gift cards. If someone insists on it, stop, hang up and report it to the FTC at ReportFraud.ftc.gov. Contact the company that issued the card right away; it may be able to freeze the money.
When you buy a card in a store, check the packaging hasn’t been opened and the scratch-off area hasn’t been tampered with.
Gift cards and kids’ devices
A prepaid gift card balance can put a limit on how much a child can spend in an app store, which some parents find easier than a saved credit card. Our guide to stopping surprise in-app purchases covers the device settings. If an order paid for with a gift card doesn’t arrive, see what to do when an online order is late.
Parents also ask
Does the five-year rule apply to promotional cards?
No. Loyalty, award and promotional cards, such as a free card handed out with a purchase, are excluded, but they must be clearly labeled and show any expiration date.
What if the card expires before the money does?
The plastic card can carry an earlier date than the funds. If it expires while money remains, you can ask for a replacement card at no charge.
What happens to my card if the store goes out of business?
Cards from a retailer that closes or files for bankruptcy can become hard or impossible to use. It’s sensible to spend gift cards promptly.
This guide is general information for U.S. shoppers, not legal advice. Safety rules and store policies change, so follow the product’s instructions and labels and check official sources such as CPSC.gov, NHTSA.gov and FTC.gov.