Is it legal for gift certificates to expire?

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Question:

I bought my mother a $75 gift certificate for a facial about a year ago, but just discovered she never used it! The certificate has a six-month expiration date. Is there any way she can still redeem this?

Answer:

An astounding number of gift certificates are probably lying around in the desk drawers of self-denying moms. But common though this problem must be, only a few states' laws have dealt with it.

People who live in California are in luck. It's against California law to put time limits on gift certificates (with a few exceptions, including gift certificates for food, from nonprofit fundraisers, and from awards programs). In New Hampshire, gift certificates under $100 cannot have an expiration date. Restaurant diners in Rhode Island can also rejoice; their gift certificates cannot expire. And in Hawaii and Massachusetts, a gift certificate must be honored for two years.

Even in states without such laws, a responsible merchant shouldn't just tear up a long-suffering mom's gift certificate. One could ask them to refund the cash -- after all, they've been using it in their business for all this time, and shouldn't get a windfall for nothing. Most merchants will recognize the need to protect their business reputation, and will try to reach a compromise.

A happy note for the future -- thanks to the federal Credit CARD Act of 2009, gift certificates issued after August 22, 2010 cannot expire for five years. However, gift card issuers can still charge an "inactivity fee" if the card has not been used within twelve months. Some gift card issuers are already complying with the Act, so check with the merchant -- maybe you are in luck. (To learn more about the new credit card act, see Nolo's article The Credit Card Act: More Protection for Cardholders.)

And let's all make a mental note: Next time we want to do something nice for mom, pick her up and make it a trip for two.

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