The money on a gift card cannot expire for at least five years under federal rules, but fees, promotional cards and store closures all come with their own terms. Here is what to check before you buy.
Gift cards seem like the simplest present there is: pick a store, load an amount, hand it over. The details printed on the card matter more than most people expect, though. Federal rules limit how quickly money on a card can expire and which fees are allowed, but those rules do not cover every card, and they say nothing about a retailer that shuts down. Here are straight answers to the questions that come up most often.
Do Gift Cards Ever Expire?
Under federal rules, the funds on a standard gift card stay valid for a minimum of five years, counted either from when the card was bought or from the most recent time money was added to it. That protection comes from the Credit Card Accountability Responsibility and Disclosure Act of 2009, carried out through Federal Reserve rules that took effect on August 22, 2010. The rules cover two types of cards: retail gift cards, which can be used only at the merchant or chain that issued them, and bank gift cards, which display a payment network logo and work anywhere that brand is accepted.
If the date printed on the card falls before that five-year mark, the issuer must move the remaining funds onto a new card without charging anything. The card itself must clearly disclose its expiration date. Some states add their own protections on top of the federal rules, so the exact details can vary depending on where you live.
There is one carve-out worth knowing about. Some cards made before April 1, 2010, that showed a shorter expiration period or first-year inactivity charges could remain on sale through January 31, 2011. Even for those cards, the federal protections applied no matter what the card said.
Can a Card Charge Fees for Sitting Unused?
Yes, but only under tight limits. A dormancy, inactivity, or service fee, meaning a charge deducted from the balance because the card has gone unused, can be applied only after the card has not been used for at least one year. After that point, no more than one such fee can be charged per month, and the fees must be disclosed clearly and conspicuously on the card or its packaging.
Other fees are still permitted. A company can charge a fee to buy the card in the first place, and it can charge a fee to replace a lost or stolen card. Shipping and handling charges may apply to cards bought by phone or online. Because each card can set its own fee schedule, read the packaging before you pay. If the fee disclosures are hard to find, that itself says something about the issuer.
What About Promotional and Discounted Cards?
The federal rules generally do not cover cards redeemable for a specific good or service, such as a hotel stay or a spa treatment, or cards that give a percentage off a purchase. Those are usually issued as promotions rather than as cards loaded with a specified amount of money, so the expiration and fee limits described above may not apply. The terms are set by whoever issues the card, so check the details before assuming the five-year rule holds.
Discounted cards sold through online auction sites raise a different concern. The FTC advises sticking to sellers you know are trustworthy and steering clear of auction sites, because cards listed there can be fakes or may have been bought with stolen payment details. A steep discount on a gift card can be a signal that something is wrong, the same pattern we describe in Are Sale Prices Real? How to Tell a Genuine Discount.
What Happens if the Store Goes Out of Business?
A card from a company that files for bankruptcy or shuts down may end up worth less than you expected. If the business closes the stores near the recipient, it can be hard to find another location that accepts the card.
That does not automatically make the card worthless. A company going through bankruptcy might keep honoring its cards, or a competing chain might take them instead. The FTC suggests calling the company to find out where things stand. It also suggests weighing a retailer’s financial shape before buying its gift cards. A card locked to one chain carries that risk; a bank gift card does not depend on any single store staying open.
Can a Lost or Stolen Card Be Replaced?
Sometimes, but nothing guarantees it. Federal rules allow issuers to charge a fee to replace a lost or stolen card, and whether a replacement happens at all is up to the company that issued it. Unlike a credit card, a gift card typically offers no recourse, meaning no way to undo purchases or claw the money back, when it is stolen or used without authorization. The FDIC compares gift cards to cash in this respect: when one is misused, the trail is difficult to follow and recovering the funds is unlikely.
Paperwork helps. Keep a copy of the card and the store receipt, and when you give a card as a gift, hand over the original receipt too, in case the card is later lost or stolen. A receipt with the purchase details is usually the starting point for any request to the issuer.
How Do You Use Up a Card You Forgot About?
Find the printed expiration date and check the balance, then plan to spend the card promptly. A card that sits unused for a year can start losing value to inactivity fees, one month at a time, so the card you find today is worth more than the same card found later. Spending it on things you would buy anyway, such as groceries, gets the full value out without adding anything to your budget, an approach that fits well with the habits in Grocery Shopping on a Budget. If the card is for a store you would never shop at, use it for necessities or pass it along to someone who will, rather than letting it lose value slowly in a drawer.
Are Gift Cards Ever Part of a Scam?
Often, and the pattern is worth knowing. Scammers talk people into buying gift cards and then giving up the numbers printed on the back, including the PIN. Those codes let whoever holds them spend the loaded money, even if the physical card is still in your wallet. Common stories involve a caller claiming to be from the IRS or another government agency demanding immediate payment, a tech support caller who says something is wrong with your computer, or an apparent friend or family member with an urgent emergency.
The rule is simple: a genuine company or government office will not ask to be paid with a gift card. Anyone who makes that request is running a scam. If you already gave card numbers to a scammer, contact the company that issued the card right away and ask for your money back, then report it to the FTC. Reports help law enforcement identify and act against the people running these schemes.
Money saver: Gift cards work as gifts, not as payment. Whoever tells you to pay them with one is running a scam, no matter the story they tell.
A gift card works best as a present when you know the terms. Check the expiration and fee disclosures, buy from a trusted source, and keep the receipt with the card. If you tend to grab cards at the register on impulse, the pause-and-think approach in The 24-Hour Rule: A Simple Way to Stop Impulse Buys can keep you from buying cards a recipient will never spend.
Quick wins
- Money on a covered gift card cannot expire for at least five years from purchase or from the last time funds were loaded.
- Inactivity fees can start only after a year of no use, at most one per month, and must be clearly disclosed.
- Cards redeemable for a specific product or a percentage off usually fall outside the federal gift card rules.
- A card from a company that goes out of business may be worth less, but the company or a competitor may still honor it.
- No real business or government agency will ever tell you to pay with a gift card.
You might be wondering
How long does money on a gift card last?
At least five years from the date of purchase or the last time money was loaded, under federal rules. If the date printed on the card is earlier, the funds can be moved to a replacement card at no cost.
Can a gift card charge a fee for sitting unused?
Only after one year of no use, and no more than one inactivity fee per month, with clear disclosure. Fees to buy the card or replace a lost or stolen card are still allowed.
What happens to a gift card if the retailer closes?
The card may be worth less than expected. The company may keep honoring it, or a competitor may accept it, so calling the company is the way to find out.
What should I do if a scammer gets my gift card number?
Contact the company that issued the card right away and ask for your money back, then report it to the FTC. Keep a copy of the card and the receipt to support your report.
These tips are general information. Prices, plans and programs vary by provider and location, so check the details with your provider before you switch or sign up.