Introduction
Consumer rights related to gift card expiration and balance refunds are evolving across the United States in 2025. With more retailers and digital platforms offering prepaid and e-gift cards, understanding how long those cards remain valid and whether leftover balances must be refunded is essential. Federal law under the Credit CARD Act of 2009 and various state laws set clear limits on expiration dates and fees, offering stronger protections to consumers nationwide.
Key Takeaways
1. Federal law prohibits most gift cards from expiring within five years of activation.
2. States like California and Washington provide additional refund rights for small remaining balances.
3. Hidden fees, dormancy charges, and inactivity deductions are heavily restricted under federal regulations.
4. Consumers can request refunds or replacement cards if their card is lost, expired, or unusable under certain conditions.
Legal Basis
Under the Credit CARD Act of 2009 and the Consumer Financial Protection Bureau (CFPB), retailers cannot set expiration dates earlier than five years from the date of issue or last reload. Furthermore, inactivity or service fees are banned unless the card has been unused for at least 12 months, and even then, such charges must be clearly disclosed. The Federal Trade Commission (FTC) enforces these protections to ensure consumers retain full value for a reasonable period. States supplement these protections with their own refund or credit balance laws, often exceeding federal standards.
State-by-State Differences
In California, gift cards with a remaining balance under $10 must be redeemable for cash upon consumer request. Washington follows a similar rule, while New York mandates clear display of expiration dates on all physical and digital cards. Massachusetts extends expiration protection to seven years, exceeding the federal minimum. On the other hand, Texas allows expiration but requires explicit disclosure at purchase. These state-level distinctions highlight the importance of checking your local consumer protection agency’s website before assuming your rights.
Real-World Cases
In 2024, the New York Attorney General fined a major retail chain for refusing to refund unused gift card balances below $5, violating state consumer law. Another case in California saw digital platform users successfully claim refunds for expired e-gift credits that were never used, setting a precedent for digital commerce compliance. These examples emphasize how enforcement actions are expanding beyond physical retailers to online ecosystems.
Step-by-Step Actions
1. Check your card’s fine print for expiration or maintenance fees.
2. Visit your state’s consumer protection website to confirm applicable refund laws.
3. If your card expires within five years, contact the issuer and reference the Credit CARD Act.
4. Request a refund if your remaining balance is below the minimum threshold allowed for cash-out in your state.
5. File a complaint with the FTC’s Consumer Sentinel Network if the merchant refuses to comply.
Why This Matters
Gift cards are one of the most popular forms of payment in the U.S., yet billions of dollars go unused every year due to confusion about expiration and refund rights. Strong consumer protection laws ensure fairness, prevent corporate misuse, and promote transparency in digital and physical commerce. Knowing your rights in 2025 means keeping more of your money and holding businesses accountable for fair practices.
FAQ
Q1: Can my gift card expire before five years?
A1: No. Under federal law, most gift cards must remain valid for at least five years from the date of purchase or last reload, ensuring long-term usability for consumers.
Q2: What happens if my gift card has a small remaining balance?
A2: Several states, such as California and Washington, require merchants to refund small balances—usually under $10—upon request. Always ask the cashier or customer service representative before discarding the card.
Q3: Can I get a replacement if I lose my gift card?
A3: In many cases, yes. Contact the issuing company with your proof of purchase or card number. Under federal consumer rights regulations, issuers must make reasonable efforts to assist cardholders in recovering unused funds.