The holidays are around the corner and the hunt for the perfect holiday gift is under way for many consumers. According to the National Retail Federation, the total spending on gift cards for the 2013 holiday season will reach $29.8 billion. Before you purchase a gift card for a family member or friend, ensure you know the expiration date of the gift card to prevent escheatment and your respective state’s escheatment laws.
The Electronic Funds Transfer Act and the Consumer Financial Protection Bureau’s (CFPB) Regulation E govern the use of expiration dates with respect to gift cards. These Federal laws dictate that if a gift card has an expiration date, consumers must have a minimum of five years from the date the card was issued, or reloaded in the case of reloadable gift cards, to use the funds. Additionally, the terms of expiration must be fully disclosed on the card, along with the expiration date.
Within the last year, some states have amended their unclaimed property laws regarding gift cards and their respective dormancy periods. For example, Maine’s unclaimed property law, as it pertains to gift cards, provides that a gift card can be considered abandoned two years after the most recent transaction involving the gift card. Tennessee’s law further provides that a gift card is considered abandoned if it remains unclaimed upon the earlier of the given expiration date on the card, or two years from issue date of the gift card. Please reference our previous post regarding Maine and Tennessee’s gift card law and requirements for more details.
For best practice, reference your state’s unclaimed property laws regarding gift card escheatment or contact a Keane representative at questions@KeaneUP.com.
Happy Holidays from Keane!