Can gift cards expire? Can merchants charge an annual fee on a gift card?

Chapter 604 of the Texas Business & Commerce Code regulates the sale of "stored value cards," a term defined to include a "gift card or gift certificate" which can be either “inscribed on a tangible medium” or “stored in an electronic or other medium and is retrievable in perceivable form.”  Review Chapter 604, Subchapter B for information on permissible fees. Subchapter C contains information about required disclosures, such as expiration dates and policies. Texas law does not contain any restrictions about how far in advance an expiration date can be – only that it be “clearly and conspicuously disclosed.”

In addition to state law, the 2009 federal Credit CARD Act [PDF] also regulates gift cards and their expiration policies. Its definitions of “gift certificate” and “store gift card” are limited to an “electronic promise” – see 15 U.S. Code § 1693l–1(a)(2)(B) and 1693l-1(a)(2)(C). Unlike Texas law, federal law does contain restrictions on expiration dates. 15 USC 1693l-1(c) states that “[A] gift certificate, store gift card, or general-use prepaid card may contain an expiration date if … the expiration date is not earlier than 5 years after the date on which the gift certificate was issued, or the date on which card funds were last loaded to a store gift card or general-use prepaid card.”

To read the portion of the federal law that relates to gift cards, see section 1693l-1 of Title 15 of the U.S. Code or read this publication from the Federal Trade Commission (FTC) that explains the new federal laws: Gift Cards.