What the CARD Act Actually Requires
The Credit CARD Act of 2009 introduced a set of baseline protections for gift card consumers that remain in effect today. Before this law, retailers could impose expiration dates of one or two years and charge monthly maintenance fees that steadily drained card balances — often without prominent disclosure.
The law now requires three core things from issuers of most retail and general-purpose gift cards:
- Minimum five-year lifespan: A card cannot expire less than five years from purchase or the most recent fund load date.
- Delayed inactivity fees: No dormancy, inactivity, or service fee may be charged until the card has been completely unused for 12 consecutive months.
- Fee disclosure: Any fees that do apply must be clearly stated on the card packaging before purchase — they cannot be buried in an online terms document alone.
These rules are enforced by the Consumer Financial Protection Bureau (CFPB). For a broader look at how consumer protections apply across different purchase types, see our complete overview of consumer rights.
5 years
Minimum gift card lifespan under federal law
The Credit CARD Act of 2009 prohibits expiration before five years from purchase or last reload date.
12 months
Inactivity required before fees can begin
Retailers may not charge dormancy or service fees until a card has been completely unused for 12 consecutive months.
$3B+
Estimated annual unspent gift card value in the U.S.
Industry research has consistently estimated billions in gift card balances go unredeemed each year, underscoring the stakes of knowing your rights.
Fees: What's Permitted and What Isn't
Even after the 12-month inactivity window passes, the CARD Act caps the damage a fee can do. Only one fee per month is allowed — a retailer cannot stack a dormancy fee, a maintenance fee, and a service fee simultaneously. Permitted fees typically include:
- Monthly inactivity or dormancy fees (after 12 months of no use)
- A one-time purchase fee on some prepaid cards (disclosed at point of sale)
What issuers cannot do under federal law: charge a fee for checking your balance at the issuer's own website or toll-free number, or impose fees not disclosed on the packaging before purchase.
Check Your State's Gift Card Laws
Several states — including California, Maine, and Washington — have enacted gift card protections that exceed the federal baseline. Some prohibit expiration dates entirely on cards sold to consumers; others require retailers to redeem remaining balances under a set dollar threshold in cash. Visit your state attorney general's consumer protection page to see what rules apply where you live.
It is worth distinguishing gift cards from prepaid debit cards. Prepaid debit cards — the kind loaded with cash and usable anywhere — are also covered by the CARD Act but may have a wider range of disclosed fees, including ATM withdrawal fees. Retail store gift cards tend to have simpler, more restricted fee structures.
Exemptions and Edge Cases
Not every card that looks like a gift card receives full CARD Act protection. The law carves out exemptions that retailers sometimes rely upon:
- Promotional cards
- Cards issued at no cost to the consumer — for example, a $10 bonus card for spending $50 — may be subject to shorter expiration periods. The expiration date must still be clearly disclosed.
- Loyalty reward cards
- Points-based or miles-based reward cards are generally not covered by gift card rules, though they may be governed by their own program terms.
- Reload cards with account-like features
- Some reloadable prepaid cards blur the line between gift card and bank product; their coverage depends on how they are structured and marketed.
If a card you received came bundled with a purchase promotion or was described as a reward, read its terms carefully — it may not carry the same protections as a standard gift card. Related considerations around fine print also come up in how store return policies are structured.
Promotional Card Disclosures Still Required
Even when a promotional card is exempt from the five-year expiration rule, federal law still requires the expiration date to be clearly disclosed on the card itself. If a promotional card you received does not display an expiration date and a balance has disappeared, you may have grounds to file a complaint with the CFPB.
When a Retailer Closes: A Special Risk
The CARD Act does not protect gift card holders if an issuing retailer declares bankruptcy or closes its doors. In bankruptcy proceedings, gift card holders are typically treated as unsecured creditors — which means recovery of the card's value is far from guaranteed.
Practically speaking, this means the best protection against retailer closure is to use gift cards promptly rather than letting balances accumulate. If you hear credible news that a retailer is in financial distress, redeeming your card balance quickly is wise. Our article on what to do when a business closes with your money covers the broader options available in those situations.
Some bankruptcy courts have allowed retailers to honor gift cards during liquidation sales, but this is at the court's discretion — not a guaranteed right. State escheatment laws may eventually transfer unclaimed balances to the state, which consumers can sometimes claim through their state's unclaimed property program.
This article provides general consumer information only and is not legal or financial advice. For questions about your specific situation, consult a qualified consumer law attorney or contact your state attorney general's office.
