eCommerce companies sell across many states and have to deal with regulations anywhere they sell. For merchants considering gift cards, escheat is a tricky, costly part of your decision.
Each state has escheat law, which determines what happens to unclaimed property. Escheat includes many types of abandoned property - including expired gift cards.
The Credit Card Accountability Responsibility and Disclosure (CARD) Act ensures gift cards cannot expire before five years and generally limits many fees until after 1 year of inactivity. But the CARD Act is federal law and only acts as a foundation.
With each state having unique escheat laws, managing unused gift cards is costly and complicated for merchants. Details vary state by state, such as when a gift card is allowed to expire and how much the state considers abandoned.
Each state has its own rules.
- New York defines 100% of expired gift cards as abandoned, while North Carolina only defines 60% of the value as abandoned.
- California doesn't even allow gift cards to expire - they are valid in perpetuity.
- Wyoming lets merchants keep all of an expired gift card if it is less than $100, otherwise 100% is considered abandoned and surrendered to the state. New Hampshire, similarly, considers 100% abandoned for gift cards over $100, but differs by not allowing gift cards under $100 to expire at all.