Do gift cards expire? What to do with those unused gift cards
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Gift cards are a powerful tool for modern businesses. From HR and research teams to customer incentives, marketing, and sales, leaders across departments drive results using gift card rewards. But what happens when cards go unused? Do gift cards expire?
Short answer: It depends. The Credit CARD Act of 2009 set a minimum validity period for gift cards. Still, different types of cards have different rules.
Understanding gift card policies can ensure recipients make the most of their cards— and companies maximize their investment.
Federal and state laws set the framework for expiration dates. However, specific terms may vary based on the type of gift card in question.
There are several types of gift cards, and each comes with its own set of rules. Store-specific cards, for example, often have more flexible terms than prepaid cards.
Prepaid cards, such as those from Visa® or Mastercard®, may include stricter regulations. Prepaid Visa and Mastercards, for example, typically offer a four-month window for redemption and a seven-month period for card use before expiration.
The Credit CARD Act of 2009 set standards for gift card expiration. This federal law aims to protect gift card purchasers and recipients from losing gift card funds unjustly.
The Act includes limitations on expiration dates and fee restrictions, helping ensure a basic level of protection for gift card holders across the US.
Federal law mandates that gift cards remain valid for at least five years. This period is calculated from either the issuance date or the last time funds were added to the card.
This requirement provides ample time for most recipients to use their gift cards. Still, companies that issue gift cards as incentives should keep tabs on usage and encourage card holders to use cards before expiration.
Businesses can avoid early gift card or prepaid card expiration with products like Reward Link that don’t expire. This way, recipients can redeem their gift cards immediately or save their redemption link for later.
Federal guidelines require that expiration dates are prominently displayed on gift cards, so purchasers and recipients can easily see how long a card will be active.
It's not just about validity; this policy also improves clarity. Federal rules help eliminate confusion surrounding gift card usage and prevent unexpected surprises at checkout.
Major retailers often choose to leave expiration dates off their gift cards. This decision can build customer trust and encourage spending, since card holders are able to use cards whenever they’d like.
Two major fee types usually affect gift cards: inactivity fees and other miscellaneous charges. These fees can differ widely depending on the card issuer.
Inactivity (or dormancy) fees are one of the most common charges linked to gift cards. Fortunately, federal laws restrict the application of such fees for a full year after the card’s purchase or last use.
A small monthly fee might be deducted after a year of inactivity—and this deduction continues until the card balance is exhausted.
To avoid inactivity fees, gift card recipients should be reminded to:
Gift card management platforms can help businesses see whether recipients have redeemed their rewards or payouts, check the available balance, and resend unredeemed rewards.
Issuers can impose fees for service-related activities including:
Gift card regulations can vary significantly from one state to another. While federal laws provide a baseline of protection, some states have enacted more stringent measures.
Business leaders should be aware of these state-specific laws, especially if recipients will be using cards in multiple states.
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As of 2024, an estimated 29% of people have let at least one gift card to expire before it was redeemed—and expiration is the primary reason gift cards go unused.
Sometimes expired gift cards still hold value. Card purchasers and recipients can explore a few options.
Even when a gift card appears to be expired, all hope is not lost. Contacting the issuer is a key first step, since retailers may still offer to honor the card.
Some issuers are open to reissuing a new card. Policies vary, so be sure to read the terms and conditions carefully and share them with card recipients.
Visa and Mastercard prepaid cards, for example, can be replaced for a fee within 60 days of the card expiration date.
Companies that purchase gift cards should securely store card numbers and receipts—and recipients should also hold on to these details. This makes replacing or redeeming cards easier if problems arise.
It can be helpful to take photos of physical cards and save screenshots or PDFs of digital gift cards. Registering cards on an issuer’s website can add another layer of protection if the card is lost or stolen.
Companies that manage rewards and payouts with Tango maintain easy access to this and other key information with our self-serve dashboard.
Gift cards can be particularly beneficial for companies looking to motivate employees, engage customers, or incentivize research—but understanding how expiration dates affect gift card use is crucial.
For instance, companies often implement gift card programs as part of their employee recognition initiatives, where the cards serve as rewards for outstanding performance—a non-monetary form of incentive pay.
If employees don’t know about card expiration policies, they may miss out on redeeming these incentives, and the company may lose that investment.
Organizations can make their incentive programs more impactful by fostering a culture of awareness around gift card policies. Businesses should communicate gift card terms clearly and consider strategies to encourage timely usage, such as reminders or promotional campaigns that highlight the benefits of redeeming gift cards before they expire.
Companies can also leverage analytics in reward platforms to track gift card usage patterns, allowing them to tailor incentive programs more effectively.
Businesses should be wary of unsolicited emails, text messages, or phone calls claiming to offer gift cards. Legitimate offers are typically promoted through official company channels and websites.
Team members should always inspect physical gift cards before purchase. Check for signs of tampering or compromised packaging. This can prevent employees from acquiring a compromised or depleted card.
To identify legitimate gift card offers, it's important to research the source thoroughly. Only purchase gift cards from businesses and retailers with security protocol. Tango, as an example, uses a comprehensive program to monitor transaction risk and ensure the security of gift cards purchased through our platform.
Best practices for gift card security include:
For digital gift cards, users should create strong, unique account passwords and add cards to a digital wallet whenever possible.
Gift cards are the backbone of highly effective corporate reward and incentive programs. But understanding gift card terms and conditions is vital, including how expiration dates work.
Tango offers a digital rewards solution to replace manual and cumbersome gift card programs.
Reward Link is the fastest, easiest, and most secure way to send a choice of digital gift cards. Your team can easily track spend activity and ensure program security—plus, Reward Link never expires, so recipients can redeem it at their convenience.
Looking to improve your enterprise reward or payout program? Download the Enterprise buyer’s guide.
