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.
