For most gift cards issued by major retail chains, expiration dates are, well, expiring. Still, for those consumers whose gift cards do expire, there are ways to recover those funds rather than losing them forever.
Expiration dates on gift cards “are really starting to go away,” says Teri Llach, group vice president for marketing at Blackhawk Network, the largest provider of third-party prepaid cards. That means more consumers get to keep the funds on their gift cards indefinitely. According to Llach, only a few retailers in a few states still make use of gift card expiration dates as a result of increased state regulations prohibiting gift card expiration dates.
It’s becoming tougher for retailers to hang onto those unused funds, even if they would like to. “States continue to tinker with their abandoned property laws,” says attorney Duncan Douglass of Alston & Bird in Atlanta, who specializes in gift cards and the state laws that apply to them. “There is still this chess game going on” between states and retailers, Douglass says. For states, “What they don’t want is the retailer to get a windfall and get to keep the unused balances.”
As of October 2008, according to the National Conference of State Legislatures website, more than 35 states have unclaimed property laws that apply to unused gift card balances. For example, in Michigan and New York, unused balances are turned over to the state (escheat) after a specified period of nonuse, rather than remaining with the retailer. In Utah and Illinois, gift card balances revert to the state with certain additional conditions, while in Florida, balances for only open-loop, network-branded gift card (such as those bearing the American Express , Visa or MasterCard logos) go to the state when unused. A minority of states, including Arizona, Maryland and Ohio, presently do not make any effort to reclaim gift card money into state coffers.
How can consumers recover their money after a gift card expires? Experts and states recommend the following steps:
Buy plastic with plastic. Just as with other credit card purchases, gift cards bought using a credit card are afforded added protections. “A gift card is basically a future delivery of goods and services,” Douglass says. “Use a credit card to purchase retailer-issued gift cards so that you have charge-back rights if the retailer doesn’t honor the gift card.”
Do your reading. When buying or receiving a gift card, study the card and any materials that accompany it carefully. In some cases, the retailer may not make it entirely clear if, how or when the gift card expires. “We encourage people to read the fine print regardless of what the merchandiser tells them,” says Elizabeth Kupchinsky, spokeswoman for the Pennsylvania Treasury Department.
Talk to the retailer. In states that allow card expiration, first talk to the retailer about your expired gift card. “We encourage people to go to the business and say, ‘Will you honor this?'” says Kupchinsky. Even if they won’t, some card issuers may allow the gift card funds to be transferred to a new card. “Generally speaking, if you e-mail or contact the retailer and complain a little bit they’ll reimburse you,” says Anthony L. Liuzzo, professor of business and economics at Wilkes University. “They’re not interested in losing a customer over a couple of dollars.”
Contact your state. If the business has already turned over your gift card funds to the state, look to your local government for help. Every state maintains an online database of unclaimed property. Additionally, a call to the Department of Revenue, state treasury department or other government branch in charge of unclaimed property could help. People who bought cards that have since expired may try to initiate unclaimed property claims, usually through the state treasurer’s office. The National Association of Unclaimed Property Administrators’ website can link you to the appropriate office in every state.
Keep any receipts or proof of purchase along with the card itself. That goes for gift card buyers as well as those who receive gift cards as a present. “The person who is able to demonstrate rightful ownership of the abandoned property in the state’s custody is the person who would be able to claim it,” Douglass says. “This can be a challenging burden of proof for a holder (whether the initial purchaser or a gift recipient) of an anonymous gift card because the state will not have a name on its records associated with the unused gift card balance,” he says. Having the card and receipt in your possession can help prove that the card belongs to you.
See related: Gift cards 2008: Special section, As holidays tighten, gift cards remain popular, 2008 gift card comparison chart, Top 10 creative ways to wrap gift cards, 8 ways to get gift cards for less