Defend Your Dollars

Gift Cards

Many consumers have either given or received a gift card. Several states have passed strong laws on retailer gift cards, resulting in many gift cards which no longer have expiration dates or fees. But, consumers continue to experience problems in trying to use their gift cards, especially with the growing number of retailers filing for bankruptcy. Bank gift cards with a major card network logo, such as a Visa or American Express gift card, have different laws.

In August of 2010, new gift card protections went into effect:

• Gift cards cannot expire less than five years from the date the card was purchased or money was last added to the card, whichever is later.

• No fees if the card has been used within the past 12 months. If a card remains unused for 12 months, then there can be one fee a month.

• Stronger state laws continue to apply, including for both expiration dates and fees.

• The bill covers both retailer gift cards and prepaid general use gift cards (the ones that often are branded as Visa, American Express, MasterCard, or Discover.) The law does not cover rewards, loyalty, telephone or promotional cards and does not cover paper gift cards or paper gift certificates.

Blog Posts

• Gift Cards and Leftovers
  Posted 11/29/06 at 11:38 am

  Your refrigerator is likely full of leftovers from the Thanksgiving holiday, but is your wallet also stuffed with leftover gift cards from last year’s holiday season? Some states have different gift card consumer protection laws which may limit fees and expiration dates. So if you’re giving a gift card this year, you may want to know what additional fees, if any, will be incurred and whether it may expire before it’s even used.

• Protect Wages on Payroll Cards
  Posted 06/22/04 at 7:00 pm

  Consumer, labor, community reinvestment and community development organizations ask the Federal Reserve Board to issue an interpretation of federal Regulation E to apply its consumer protections to stored value cards, particularly for payroll cards.

• California Bans Most Service Fees on Gift Certificates
  Posted 08/04/03 at 6:45 pm

  A new law going into effect January 1, 2004 in California bans nearly all service fees on retailer gift cards and gift certificates. Gift cards are proliferating. The Wall Street Journal estimated in Feb. 2003 that $36 to $38 billion in gift cards were sold in 2002.