Gift cards can expire, but technically but have at least one year to use them penalty free---and up to five years guaranteed.
ATLANTA — The holiday season has come and gone, but if you're a lucky one with some gift cards, there's still shopping to be done!
But are there limits in how long you have to spend such cards?
THE QUESTION
Do gift cards expire?
THE SOURCES
THE ANSWER
Gift cards can expire, but technically you have at least one year to use them penalty free---and up to five years guaranteed.
WHAT WE FOUND
"About half of us are sitting on unused gift card value," Ted Rossman, senior industry analyst at CreditCards.com, told the Verify team. "It actually works out to an average of about $175 per person, which is $21 billion across the country."
So if you're one to forget about a gift card at the bottom of your purse or have found one in a dresser drawer, you're not alone. According to a recent poll released by the group, 47% of people have at least one unused gift card or store credit waiting to be spent, which could leave some questions about how long a gift card is good for.
Turns out, federal law sets some standards to protect consumers. Under the Credit Card Act of 2009, a gift card cannot expire for at least five years from the date the card was purchased or the last date funds were reloaded. According to the Federal Trade Commission, if the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost. Meanwhile, inactivity fees can be charged only after a card hasn't been used for at least one year.
Rossman said that's an important point to keep in mind.
"That's a good tip that can eat into the value pretty quickly," he said. "That's one of the reasons to use them sooner rather than later."
Verify viewer Jenni also wanted to know what happens to the money if a gift card is not spent? Georgia law is specific with that answer, stating "a gift certificate or a credit memo issued in the ordinary course of an issuer's business which remains unclaimed by the owner for more than five years after becoming payable or distributable is presumed abandoned."
According to the law, the retailer is supposed to send the purchase amount to the state's unclaimed property division where the money is held for the owner. You can search for any unclaimed property you may have in the Georgia Department of Revenue database.
So yes, it's true gift cards can expire, but federal protection ensure consumers have at least one year to use their gift cards penalty free and up to five years guaranteed. But given inflation and the risk of a business closing, Rossman said it's best to spend gift cards you have sooner rather than later.
"We see a sizable number of people who've either lost a gift card or maybe the store went out of business before they had a chance to use it," Rossman said. "I tend to think out of sight, out of mind. So, it's important to find these and come up with a plan."
Looking for other ways to spend your unused gift cards? According to CreditCards.com, regifting is always an option and can help you save on presents for other people. You can also advantage of gift card resale sites like Raise.com or eBay. Experts say such sites can pay out up to 92% of the card’s value in cash.
Learn more here.
As a seasoned financial analyst with a deep understanding of consumer protection laws and regulations, particularly in the realm of gift cards, I can confidently provide insights into the concepts mentioned in the article.
Firstly, the article refers to the Credit CARD Act of 2009, a crucial piece of federal legislation that sets standards to protect consumers regarding gift cards. Under this act, a significant aspect highlighted is that gift cards cannot expire for at least five years from the date of purchase or the last date funds were reloaded onto the card. This is a critical point of reference for anyone holding or considering purchasing gift cards.
The Federal Trade Commission (FTC) is mentioned as a source, emphasizing the importance of federal oversight in ensuring consumer rights. According to the FTC, if a gift card's expiration date is earlier than the mandated five-year period, the remaining funds can be transferred to a replacement card at no cost to the consumer. This federal protection ensures that consumers have a reasonable timeframe within which to utilize their gift cards without penalty.
Additionally, the article touches on the issue of inactivity fees, clarifying that such fees can only be charged after a gift card hasn't been used for at least one year. This limitation is a crucial safeguard for consumers, preventing the rapid erosion of the card's value over time.
The reference to Georgia code 44-12-205 adds a state-specific dimension to the discussion. According to this code, a gift certificate or credit memo that remains unclaimed for more than five years is presumed abandoned. In such cases, the retailer is obligated to send the purchase amount to the state's unclaimed property division, where it is held for the owner. This state law provides an additional layer of protection for consumers in Georgia.
To further underscore the importance of timely use, the article includes insights from Ted Rossman, a senior industry analyst at CreditCards.com. Rossman notes that inactivity fees can quickly diminish the value of gift cards and recommends using them sooner rather than later. This advice is particularly relevant considering the risk of businesses closing and the impact of inflation on the purchasing power of the gift cards.
In conclusion, the article effectively communicates the federal and state regulations governing gift card expiration, highlights the role of key sources such as the FTC and the Credit CARD Act of 2009, and provides practical advice from industry experts to ensure consumers make the most of their gift cards.
FAQs
Under federal law, a gift card cannot expire in less than five years after the date of purchase. But if it's not used within 12 months, fees for inactivity, dormancy or service can be charged to the card each month, diminishing its value.
What to do if Visa gift card expired but says funds do not expire? ›
(It's important to note that while your card may have expired, the funds remaining on the card do not expire. If you have a balance on your expired card, contact the financial institution that issued your card or refer to your cardholder material to learn how to order a new card.
What happens to the money on an expired gift card? ›
To the company, when a gift card is sold, it is registered as an advanced payment. This is because they know you will come back to redeem it in the future. However, when you don't, and it expires, some of that unspent balance goes back to the brand. The percentage depends on the state and tax laws governing them.
What happens if you don't use all the money on a gift card? ›
Some cards — especially generic cash cards from Visa or MasterCard — will start accruing inactivity fees if they're not used for a year, which eats away at their value. Inflation also makes cards less valuable over time. And if a retail store closes or goes bankrupt, a gift card could be worthless.
How to use expired gift card balance? ›
1. Contact the retailer: Some retailers may still honor an expired gift card if you contact them and explain the situation. It's worth a try to reach out to customer service and see if they can do anything for you. They may offer to extend the expiration date or provide you with store credit.
How do I get money off my expired Visa gift card? ›
How to Get Money Off an Expired Prepaid Card? If your prepaid card expires with funds remaining, your first step should be contacting the card issuer for detailed guidance. Sometimes, you may have the option to request a replacement card or receive a check with your balance, potentially for a fee.
How do I get my money back from an expired card? ›
What if the credit or debit card I paid with is expired or deactivated? In this case, your refund will be automatically directed back to the bank account linked to that card. There's nothing you need to do — your bank should sort it out for you, provided the account is still open.
Is there a way to redeem an expired gift card? ›
If your card has expired, you might be out of luck. If you discover that your gift card has expired, our advice is to use Resolver to contact the retailer. Although they're under no obligation to extend gift cards or gift vouchers, they might decide to do so as a goodwill gesture.
Can you extend an expired gift card? ›
Once a gift card has expired, it cannot be extended.
Can you claim expired gift cards? ›
The expiry date must be shown
For example, “Valid for 4 years from the date of issue. Date of issue: March 2021”. Check the expiry date on the gift card or voucher carefully. Businesses do not need to honour the gift card after a valid expiry date has passed.
What Happens to Unspent Gift Cards? Many people want to know what happens to gift cards that got expired when it still has some amount in them. Not to keep you guessing for long, these gift unspent gift cards are a benefit to the issuing company or brand. The issuer gets more from the unused gift voucher.
How do I get money off my unused gift card? ›
Raise, CardCash and GameFlip are reputable companies that help you sell U.S. gift cards for cash. Selling gift cards often involves marking down the price and paying a fee. Gift card exchanges vary in the cards they allow, selling fees and more.
How long does a gift card last if not used? ›
In most cases, a gift certificate or gift card can expire after five years. But some state laws provide even greater consumer protections than federal law. If you're planning on buying a gift certificate or gift card—or if you've recently received one—you should learn how they work and what laws apply to them.
Can I redeem an old gift card? ›
Look at the expiration date. As of 2009, gift cards can't expire within five years of the date they were issued. If it is older than five years ago, you can try to redeem it, but it may have already expired.
How do I account for expired gift cards? ›
To recognize revenue for expired gift cards, enter a manual accounting journal to debit the value from the gift card liability code and credit it to the gift card sales code. Alternatively, a separate account sales type account code can be used specifically for "Expired gift cards".
What do I do if my gift card has expired? ›
It's best not to get caught out. If your card has expired, you might be out of luck. If you discover that your gift card has expired, our advice is to use Resolver to contact the retailer. Although they're under no obligation to extend gift cards or gift vouchers, they might decide to do so as a goodwill gesture.
What is the law on Visa gift cards expiration? ›
Federal Law Offers Protections
Bank gift cards, which carry the logo of a payment card network (e.g., Visa, MasterCard), are also subject to Credit CARD Act protections and can be used wherever the brand is accepted. Under the law, a gift card cannot expire until at least five years from the date it was activated.
What happens if a gift card doesn't have an expiration date? ›
You can use them indefinitely if there's money on the card. Other prepaid cards (those not marketed and labeled as a gift card or gift certificate), such as general purpose reloadable cards, as well as other products, including certain non-reloadable accounts and digital wallets, are also covered under the CARD Act.
What does "funds do not expire" mean? ›
Expiration of Card FUNDS DO NOT EXPIRE. The plastic card will be unusable after the “valid thru” date stated on the Card. The “valid thru” date is not an expiration date on the Card funds. The amount remaining on the Card will be available until the amount reaches zero.
