Gift Card Expiration Laws in the US: Federal Rules and State Variations (2026 Update)
Gift cards do not expire under federal law for most types, including store gift cards and general-use prepaid cards. The Credit CARD Act of 2009, effective around 2010, prohibits expiration dates on these cards. CFPB Regulation E § 1005.20 from the Consumer Financial Protection Bureau requires funds to remain available for a minimum of five years. Fees are limited, with dormancy or inactivity fees allowed only under specific disclosure rules.
State laws add variations. For example, California's SB 22, effective April 1, 2026, mandates cash redemption for balances under $15 and permits a $1 monthly fee after two years of inactivity if the balance is under $5. Other states have rules on fees after 2-5 years of inactivity and escheatment periods of 3-5 years. These protections help consumers redeem balances fully and retailers comply with disclosure and escheatment requirements.
Federal Gift Card Protections Under the CARD Act and Regulation E
The Credit CARD Act of 2009 sets a nationwide baseline by prohibiting expiration dates on gift certificates, store gift cards, and general-use prepaid cards, such as those issued by banks like Visa or Mastercard. This took effect around 2010.
CFPB Regulation E § 1005.20 reinforces these rules with a minimum five-year funds availability period. Issuers cannot impose expiration dates that reduce available funds before 60 months. Dormancy, inactivity, or service fees are permitted but only after clear and conspicuous disclosures. These must appear through signage, toll-free numbers, websites, or advertising, especially for cards issued before 2010-2011 compliance dates. For pre-2010 cards, issuers must provide disclosures via signage, calls, websites, or advertising under delayed compliance rules.
The rules cover both physical and electronic cards. FDIC guidance confirms bank-issued prepaid cards fall under these protections, limiting fees to prevent early balance erosion.
State Variations in Gift Card Expiration, Fees, and Escheatment
While federal law bans expirations on most gift cards, states impose additional rules on fees, cash redemption, and escheatment--when unused balances transfer to the state as unclaimed property.
California allows a $1 monthly fee after two years of inactivity if the balance drops below $5. Idaho requires escheatment after five years if the balance exceeds $50 and no expiration is displayed. Louisiana mandates escheatment after three years of inactivity. Massachusetts triggers escheatment after 90% of the balance is redeemed. Washington and Oklahoma permit $1 monthly fees after two years on reloadable cards with balances under $5.
Escheatment occurs after 3-5 years of inactivity in many states. In some, states claim balances after 3-5 years regardless of expiration dates. These variations can conflict with federal dormancy limits, so issuers must track state-specific thresholds.
California's Updated Gift Card Law and What It Means in 2026
California's SB 22, effective April 1, 2026, raises the cash-redemption threshold to $15 for low balances, up from prior levels. This applies to both physical and electronic gift cards, ensuring consumers can request cash refunds when balances fall below this amount.
The law does not alter federal prohibitions on expiration dates or broad fee limits. It maintains the $1 monthly fee allowance after two years of inactivity for balances under $5. Retailers must prepare for increased redemption requests and update policies. Consumers gain stronger access to small balances, aligning with federal five-year funds availability.
How to Check Your Gift Card's Expiration and Fees by Role
For Consumers
Verify federal protections first: most gift cards have no expiration and funds available for at least five years under CFPB § 1005.20. Check the card or issuer's website for disclosed dormancy fees. For state rules, note thresholds like California's $15 cash-redemption starting 2026, which covers electronic cards. Contact the issuer via toll-free number or website for balance and terms. If inactive over 3-5 years, inquire about escheatment risks in your state.
For Retailers
Ensure conspicuous disclosures of any fees via signage, websites, and packaging, per Regulation E. Comply with the CARD Act's no-expiration rule for store and general-use cards. Track inactivity for state escheatment--often 3-5 years--and remit unclaimed balances. In California, prepare for $15 cash-outs from April 1, 2026, and limit fees to $1 monthly after two years if under $5. Review state laws annually to avoid violations.
Quick Comparison: Federal vs. Key State Gift Card Rules
| Rule Type | Federal (CARD Act / Reg E § 1005.20) | California (2026, SB 22) | Other States Examples |
|---|---|---|---|
| Expiration | Prohibited on most store/general-use prepaid cards | No change; follows federal ban | Varies; some escheat after 3-5 years inactivity (e.g., LA 3 years) |
| Fees | Dormancy/inactivity allowed with disclosures; 5-year funds availability | $1/month after 2 years if balance < $5 | $1/month after 2 years if < $5 (WA/OK reloadable); state-specific |
| Escheatment | Not specified; states handle | Follows state inactivity rules | 3-5 years inactivity (e.g., ID >$50 after 5 years; MA after 90% redeemed) |
| Cash-Out | Not required | Mandatory for balances < $15 (electronic cards included) | Varies; some states have low-balance redemption thresholds |
FAQ
Do gift cards expire under US federal law?
No, the CARD Act of 2009 prohibits expiration dates on most gift certificates, store gift cards, and general-use prepaid cards.
What is the 5-year rule for gift card funds?
CFPB Regulation E § 1005.20 requires funds to remain available for a minimum of five years, with disclosures for any dormancy fees.
Does California's 2026 gift card law change expiration dates?
No, SB 22 effective April 1, 2026, maintains the federal ban on expirations while adding a $15 cash-redemption threshold.
When can states claim abandoned gift card balances?
After 3-5 years of inactivity in many states, such as Louisiana (3 years) or Idaho (5 years if over $50).
Are fees allowed on gift cards, and how must they be disclosed?
Dormancy or inactivity fees are allowed under federal rules with clear disclosures via signage, websites, or toll-free lines. States like California limit to $1/month after two years if under $5.
How do gift card rules apply to electronic or Visa/Mastercard cards?
Federal protections cover electronic and bank-issued cards like Visa/Mastercard. California's SB 22 explicitly includes electronic gift cards for cash redemption under $15.
To stay compliant, consumers should check balances regularly via issuer websites, while retailers review CFPB guidelines and state unclaimed property offices for updates.