Can Gift Cards Expire?

We’ve all been there.

You want to send a thoughtful gift to your mom for her birthday. She has everything. She lives far away. And the thought of purchasing something, wrapping it in post-office-approved paper, figuring out postage, and standing in line makes you want to lie down for a bit.

So you do what modern, well-intentioned people do.  You go online and send a really thoughtful gift card.  After all, nothing says “I care about you” quite like an automated email cheerfully announcing that someone now has $50 to spend at their leisure.

But what happens if they don’t use it right away?  Or… ever?  Is it legal for gift cards to expire??  Short answer: not anytime soon.

Thanks to a federal law called the Credit Card Accountability Responsibility and Disclosure Act — yes, there is absolutely an Act for this — most gift cards cannot expire for at least five years from the date they’re issued (or last reloaded).

So that part is good news.  But here’s where the fine print sneaks in.  If the gift card isn’t used for at least 12 months, the issuer may be allowed to charge certain fees — often called dormancy, inactivity, or service fees. Those fees:

• can usually only be charged once per month,

• must be clearly disclosed on the card or its packaging,

• and can quietly nibble away at the balance over time.

If the card is lost, issuers may also charge a replacement fee, depending on the terms.

Translation: the money doesn’t disappear overnight, but it can slowly evaporate if no one is paying attention.

So if you’re about to click “purchase,” this is your gentle reminder to:

• glance at the fine print (I know),

• check whether inactivity fees apply,

• and maybe encourage the recipient to actually use the thing.

Well done.  Knowing all this makes you an expert in gift card law.  Now go call your mother.