Gift cards are unique gifts to give anyone for a special occasion. Not only are they the more preferred gift for the receiver, but they are also practical and pose fewer issues than buying an actual gift. Despite this, many laws are surrounding these cards that cannot be ignored. If an individual can educate themselves about these laws, especially in the state they reside, they’ll have no issues with the card after the purchase.
Because of the Credit Card Accountability Responsibility and Disclosure Act (CARD), gift cards cannot expire for five years. This rule is a federal law that applies to every state in the country.
Also, the receiver of the gift card must know of any terms and conditions that come with the card. This rule includes any information about the expiration date. However, some states have enforced specific circumstances to this rule that the receiver must follow.
To view the specific laws regarding expiration dates in each state, check out this chart for more information.
When it comes to fees, each state has different laws regarding the charges someone can have during a transaction. However, some fee laws apply to every state, and those are:
There must be a disclosure of any fees either on the card or on the packaging of the card. If states allow post-sale fees, then these fees cannot apply until after one year of inactivity. There shouldn't be more than one post-sale fee per month.
On the other hand, some states make their versions of laws and legislation about post-sale fees for gift cards. These fees are charged after a purchase has occurred and includes:
- Maintenance fees
- Activation fees
- Transaction fees
Once again, it is required by federal law that these fees are disclosed somewhere with the gift card.
Sometimes when people haven’t used their gift cards entirely, they can cash in the remaining amount. However, this does come with some conditions and rules, especially in different states.
In some states, people can only redeem gift cards once they reach a specific amount. This amount is typically small, like $5-$10, but it could be a more significant amount in other states.
Many states, on the other hand, do not apply this rule to gift cards. They will require individuals to spend all the money on the gift card until it expires. If the person still has a balance once the gift cards expire, then that balance will be turned over to the state:
- After five years of inactivity
- After two years of inactivity
This time frame of when the money is turned over to the state solely depends on where a person lives.