Gift cards sold in Massachusetts do expire, but not for a long time. Under state law, most gift cards must stay valid for at least seven years from the date they were issued, and retailers cannot chip away at the balance with dormancy or service fees.1General Court of Massachusetts. Massachusetts General Laws Chapter 200A, Section 5D – Gift Certificates; Validity; Expiration; Redemption The seven-year floor is one of the longest in the country. It covers most store-issued gift cards, paper gift certificates, and electronic gift cards, though bank-branded cards from Visa or Mastercard follow different federal rules.
The Seven-Year Rule
Chapter 200A, Section 5D of the Massachusetts General Laws requires any gift certificate sold in the state to remain valid for no fewer than seven years after the date of issuance.1General Court of Massachusetts. Massachusetts General Laws Chapter 200A, Section 5D – Gift Certificates; Validity; Expiration; Redemption The clock starts on the purchase date, not the first time the recipient uses the card. A retailer cannot reset that period by reissuing a replacement card or by requiring activation.
The statute also requires the issuance date and the expiration date to be clearly printed on the card itself. For electronic cards with a stored dollar value, those dates have to appear on the sales receipt given to the buyer at checkout, or be accessible through a website or toll-free phone number.2General Court of Massachusetts. Massachusetts General Laws Chapter 200A, Section 5D
Here is the detail that catches most people off guard. If a gift card does not clearly display an expiration date and the retailer has not made that date available through any of those channels, the card never expires. The statute calls it “redeemable in perpetuity.”1General Court of Massachusetts. Massachusetts General Laws Chapter 200A, Section 5D – Gift Certificates; Validity; Expiration; Redemption So if you find an old undated gift card in a drawer, the law is on your side.
Which Cards Get the Seven Years
Massachusetts defines “gift certificate” broadly under Chapter 255D, Section 1. The definition covers any writing or electronic card purchased by a buyer for someone else’s use, redeemable for goods or services at the seller’s business. That takes in traditional plastic gift cards, paper gift certificates, merchandise credits, and other formats where the buyer paid full face value in exchange for future purchasing power.3General Court of Massachusetts. Massachusetts General Laws Chapter 255D, Section 1 – Definitions
Two categories are carved out of that definition and do not get seven-year protection:
- Prepaid calling cards sold to buy phone minutes.
- Electronic cards usable at multiple unaffiliated retailers, such as Visa or Mastercard gift cards. These follow federal rules instead.3General Court of Massachusetts. Massachusetts General Laws Chapter 255D, Section 1 – Definitions
Promotional gift certificates handed out as part of a marketing campaign can carry shorter expiration dates, because the recipient did not pay full face value for them. A store can put a 90-day deadline on a “$10 off” promotional card as long as that limit is disclosed up front. But any card where someone actually paid money for the balance gets the full seven years.
No Dormancy or Service Fees
Massachusetts takes a hard line on fees. Chapter 266, Section 75D makes it a criminal offense to sell a gift certificate that imposes dormancy fees, service fees, administrative fees, or any other charge that reduces the card’s redeemable value. Violations carry a fine of up to $300 per offense.4General Court of Massachusetts. Massachusetts General Laws Chapter 266, Section 75D – Imposition of Certain Fees Reducing Total Value Amount of Gift Certificate; Penalty
This is a flat ban, not a waiting period. Some states allow inactivity fees to kick in after a dormancy period; Massachusetts prohibits them entirely on store-issued gift cards. A retailer cannot charge you for checking your balance, for not using the card within some window, or for any “maintenance” on the account. A fee policy printed on a gift card sold in Massachusetts is already a violation.
Cashing Out Small Remaining Balances
Spending a card down to exactly zero is often impossible, so the statute gives you a way to convert a small remainder into cash.
For a non-reloadable card, once you have used at least 90 percent of the original face value, you can ask the retailer for the rest in cash rather than continuing to use the card. On a $50 card, that right kicks in after you have spent $45 or more. For a reloadable card, you can request cash once the remaining balance drops to $5.00 or less.1General Court of Massachusetts. Massachusetts General Laws Chapter 200A, Section 5D – Gift Certificates; Validity; Expiration; Redemption
The choice belongs to you, not the retailer. Not every cashier knows about this rule, so you may need to ask a manager and reference the statute. Keep the receipt showing the remaining balance.
Visa and Mastercard Gift Cards Follow Federal Rules
Visa, Mastercard, and American Express gift cards sold in drugstores and grocery stores are not covered by the Massachusetts seven-year rule. Because they can be used at multiple unaffiliated merchants, they fall outside the state’s definition of a gift certificate and are regulated instead by the federal Credit CARD Act of 2009.5Office of the Law Revision Counsel. 15 USC 1693l-1 – General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards
The federal rules are less generous:
- The card has to stay valid for at least five years from the date of issuance or the last date funds were loaded, whichever is later.
- Dormancy, inactivity, or service fees are allowed after 12 months of no activity, but no more than one fee can be charged per month.5Office of the Law Revision Counsel. 15 USC 1693l-1 – General-Use Prepaid Cards, Gift Certificates, and Store Gift Cards
A $50 Visa gift card sitting in a desk for two years can quietly lose value to those monthly fees. If you receive one, spend it relatively quickly. The fee terms have to be disclosed on or with the card packaging, so check before you buy one as a gift. Complaints about these cards go to the Consumer Financial Protection Bureau rather than the state attorney general.6Consumer Financial Protection Bureau. CFPB Begins Accepting Consumer Complaints on Prepaid Cards and Additional Nonbank Products
What if a Business Refuses a Valid Card
A retailer that refuses to honor a valid, unexpired gift card is breaking the law. The refusal can qualify as an unfair or deceptive practice under the Massachusetts Consumer Protection Act, Chapter 93A.7Mass.gov. The Massachusetts Consumer Protection Law
Start at the store. Ask for a manager and bring your receipt or credit card statement showing when the card was purchased. Many refusals happen because a cashier does not know the rule, and a manager can usually override the register. If the manager will not help, ask for a written explanation of why the card is being rejected.
If the store still refuses, you can file a complaint with the Attorney General’s Consumer Advocacy and Response Division through the AG’s website.8Mass.gov. File a Consumer Complaint For individual recovery, you can send a Chapter 93A demand letter describing what happened and the relief you want. The business then has 30 days to respond with a reasonable settlement offer, and sending the letter is a required first step before a 93A lawsuit.7Mass.gov. The Massachusetts Consumer Protection Law If the business ignores the letter or answers in bad faith, small claims court in Massachusetts handles disputes up to $7,000.9General Court of Massachusetts. Massachusetts General Laws Chapter 218, Section 21 A court that finds the retailer’s conduct willful, or a refusal to settle in bad faith, can award two to three times actual damages plus attorney’s fees and costs.10General Court of Massachusetts. Massachusetts General Laws Chapter 93A, Section 9
The Bankruptcy Exception
State expiration protections stop at the courthouse door. If the company that issued the card files for bankruptcy, the card becomes an unsecured claim against the retailer’s remaining assets.
In a Chapter 11 reorganization, the business continues operating while restructuring its debt, and it has to petition the bankruptcy court for permission to keep honoring gift cards. That permission is not automatic. Some retailers ask for and receive it; others do not, which leaves outstanding cards worthless unless the cardholder files a formal proof of claim with the court.11Federal Reserve Bank of Boston. Gift Card Value When Issuers Go Bankrupt Even when a court allows redemption, the terms can be harsh. In the Sharper Image bankruptcy, customers had to spend twice the amount of their gift card balance in a single transaction before they could use it.
In a Chapter 7 liquidation, where the business shuts down for good, gift card holders are general unsecured creditors, near the back of the line behind secured lenders and priority claims. Practical recovery is usually pennies on the dollar or nothing.
If you hear a retailer is in financial trouble, spend the card right away. Waiting until after a filing sharply reduces your chances of getting any value out of it.
Store Credit From Returns
Merchandise credit from a return gets its own protection under a separate statute, Chapter 93, Section 14S. Like gift cards, credit slips must be valid for at least seven years.12General Court of Massachusetts. Massachusetts General Laws Chapter 93, Section 14S – Redemption of Credit Slips; Time Limitation If a store gives you a merchandise credit in January, you have seven years to spend it. Retailers sometimes print shorter deadlines on credit slips, but those deadlines are unenforceable if they fall within the seven-year window.