Restaurant gift cards generally do not expire for at least five years under federal law, and in many states they cannot expire at all. The Credit Card Accountability Responsibility and Disclosure Act of 2009 sets a five-year floor on the funds loaded onto a gift card, measured from the purchase date or the date money was last added. That protection has real gaps, though: paper certificates, promotional cards, inactivity fees, and a restaurant going out of business can all shorten what you actually get to redeem.
The Federal Five-Year Rule
A gift card cannot be sold with an expiration date earlier than five years after it was issued or after funds were last loaded onto it.1Office of the Law Revision Counsel. 15 USC 1693l-1 General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards For a standard restaurant gift card, the clock starts on the purchase date. Reload the card, and the five years resets from that new load.
The card itself and the money on it are treated as two different things. A plastic card can carry a printed expiration date, but the underlying funds may still be good after it. The federal regulation requires the issuer to say so on the card and to give you a way to request a replacement.2eCFR. 12 CFR 1005.20 Requirements for Gift Cards and Gift Certificates If you find an old restaurant card in a drawer with a date that has passed, call the issuer before you assume the money is gone.
Inactivity Fees Can Drain a Card That Never Expires
A card that outlives its five-year window can still bleed value through dormancy fees. Federal law permits them, but only if the card has gone at least twelve consecutive months with no activity, and even then the issuer can charge no more than one fee per month.3Office of the Law Revision Counsel. 15 USC 1693l-1 General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards
“Activity” has a narrow meaning. It refers to something that changes the balance, like a purchase or a reload. Checking your balance does not count and does not reset the twelve-month clock.4Consumer Financial Protection Bureau. 1005.20 Requirements for Gift Cards and Gift Certificates To keep the fee timer from starting, you have to actually use the card.
Fees also have to be disclosed on the card itself. A sticker, a label, or the packaging does not satisfy the rule.2eCFR. 12 CFR 1005.20 Requirements for Gift Cards and Gift Certificates If a restaurant’s gift card is silent on fees, the issuer generally cannot charge any.
Paper Gift Certificates Are Not Covered
Here is the exception that catches people. The federal statute excludes items “issued in paper form only” from the definitions it protects.1Office of the Law Revision Counsel. 15 USC 1693l-1 General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards A paper restaurant certificate is not covered by the five-year rule and is not covered by the inactivity-fee restrictions.
Whatever protection you have comes from state law, and that varies. Some states forbid expiration dates on paper certificates too; others allow much shorter windows. If someone hands you a paper certificate for dinner, treat it as time-sensitive.
Promotional and Bonus Cards Are Not Covered Either
The “buy $50, get a $10 bonus” card that appears every holiday season looks like a gift card but is not one, legally speaking. The CARD Act excludes loyalty, award, and promotional gift cards as long as no money was paid for them.3Office of the Law Revision Counsel. 15 USC 1693l-1 General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards
The regulation requires these promotional cards to identify themselves as promotional on the front and to display any expiration date prominently.2eCFR. 12 CFR 1005.20 Requirements for Gift Cards and Gift Certificates Once those disclosures are made, the restaurant can pick any expiration date it likes. A thirty-day window on a bonus card is legal. Read the promotional card like a coupon, because that is what it functions as.
When State Law Gives You More
The federal statute preserves any state law that protects consumers more than federal law does.5Office of the Law Revision Counsel. 15 USC 1693q Relation to State Laws The five-year rule is a floor, not a ceiling. A number of states prohibit gift card expiration dates outright, which effectively makes restaurant gift cards valid indefinitely there. Several also ban inactivity fees entirely.
Which state’s law applies typically depends on where the card was purchased or where the issuer is based. Because the federal exemption leaves paper certificates uncovered, state law matters most for those.
If the Restaurant Closes Before You Redeem
An expiration rule does not help if the business itself disappears. A gift card is an unsecured promise of future food, and when the restaurant is gone, so usually is the promise. What you can do depends on how it closed.
For a restaurant that shut down without filing bankruptcy, contact the owner through your secretary of state’s business records, ask your credit or debit card issuer about reversing the original purchase, and consider your state attorney general’s consumer protection office.
If bankruptcy was filed, gift card holders are treated as unsecured creditors. Consumers who paid for goods or services never delivered can hold a priority claim of up to $3,800 per person under the Bankruptcy Code.6Office of the Law Revision Counsel. 11 USC 507 Priorities Priority means you are paid ahead of general unsecured creditors, but only if you file a proof of claim before the court’s deadline. Cardholders who miss it usually recover nothing. Check the bankruptcy docket for the claims deadline as soon as you hear the restaurant has filed.
If the Card Is Lost or Stolen
Gift cards do not carry the fraud protections that credit and debit cards do. If a thief drains your balance, no federal law requires the issuer to reimburse you.7FDIC. What You Should Know About Gift Cards Whatever recovery you get depends on the issuer’s own policy.
Reporting a loss is still worthwhile. Many restaurant chains will freeze the remaining balance and issue a replacement if you can provide the card number and proof of purchase. Keeping the receipt and registering the card online when you first get it makes that far easier.
Small Balances and Unclaimed Property
About a dozen states require merchants to redeem gift cards for cash once the balance drops below a set threshold. Those thresholds usually fall between one and ten dollars, with five dollars the most common cutoff. In the rest of the states, the last few dollars have to be spent on the menu.
Separate from expiration, some states require businesses to turn over unused gift card balances to a state unclaimed property office after a dormancy period, typically three to five years of inactivity. Some states exempt gift cards from these escheatment laws entirely. When a state takes the funds, the restaurant’s obligation ends, and you recover the money by filing a claim with the state rather than at the restaurant. If a card has been sitting unused for years, check your state’s unclaimed property database.
Where to File a Complaint
If a restaurant refuses to honor a valid card, charges illegal fees, or imposes an unlawful expiration date, the Consumer Financial Protection Bureau handles prepaid and gift card complaints.8Consumer Financial Protection Bureau. Submit a Complaint For scams rather than policy violations, the Federal Trade Commission takes fraud reports. Your state attorney general’s consumer protection division is another route, and often the right one when the violation is of a state law that goes beyond the federal minimum.