Many people view gift cards as an easy choice when shopping for loved ones. The gift card industry totals over $100 billion and today we made determinations that will help clarify the protections for consumers when using gift cards.
Federal law generally prohibits the sale of a gift card that expires sooner than five years after the date when funds were last loaded onto the card. At the same time, unclaimed property laws in Maine and Tennessee consider some gift cards abandoned property as early as two years after purchase.
We received requests to determine whether certain provisions of unclaimed property laws in Maine and Tennessee are inconsistent with federal laws on gift card expiration dates. We are now responding to these requests, after evaluating whether state law conflicts with federal law and whether state law is more protective of consumers than federal law.
Tennessee has a law that allows gift card issuers to decline a card once the card is considered abandoned property. We have determined that specific provision of Tennessee law is inconsistent with federal law and that gift cards covered by the federal law must be honored for at least five years.
In Maine, state law requires that gift cards be honored indefinitely, even if the card is considered abandoned property. As a result, we determined that Maine’s law does not conflict with federal law.