Can gift cards expire? Can a merchant charge an inactivity fee?

Yes, it is possible for a gift card to expire. There are both federal and Texas laws that govern gift cards.

Federal Law

Section 1693l-1, Title 15 of the U.S. Code regulates gift cards. These laws were passed as part of the 2009 Credit Card Accountability Responsibility and Disclosure (Credit CARD) Act. Under this Act, gift certificates, store gift cards, and bank gift cards can't expire for five years. The expiration date must also be clearly stated on the card.

This law also places limitations on fees. For example, the card issuer cannot charge a dormancy or inactivity fee unless there has been no activity for one year. The fee policy must also be clearly stated.

Texas Law

Chapter 604 of the Texas Business and Commerce Code regulates the sale of both gift cards and gift certificates. Texas law does not contain any restrictions about how far in advance an expiration date can be. However, the expiration date must be clearly disclosed (see Chapter 604, Subchapter C of the Business and Commerce Code).

Under Chapter 604, Subchapter B of the Business and Commerce Code, fees are permissible as long as they are reasonable and disclosed.

Related FAQs & Guides

FAQs

• Can a business charge a fee for using a credit card or a debit card instead of cash?
• What does the law say about refunds and return policies?

Guides

• Consumer Protection