Sitting on an expired gift card? You have options, including a possible class action lawsuit.

When someone buys or receives a gift card, they might think they might be able to use them until the end of time. Sorry to tell you, but that’s not true.

The 2009 federal Credit Card Accountability Responsibility and Disclosure (CARD) Act allows gift cards to expire after five years. However, some states have even longer expiration periods.

Despite these laws, there are businesses that think they can play a gift card holder before the card has reached its legal expiration date. Consequently, consumers may not be able to use their gift cards and basically have to write off their purchase as a bad idea.

In addition to the law forbidding the expiration of a gift card for five years from the date the card was purchased, consumers have other rights. For one thing, if the expiration date listed on the card is earlier than the five-year limit, the money can be transferred to a replacement card at no cost.

The Federal Trade Commission (FTC) says that consumers need to understand that businesses can charge an inactivity fee, however, if a card hasn't been used for one year. Those inactivity fees can be charged once a month. There may, however, also be fees associated with buying the card or replacing one that has been lost or stolen.

The last rule is that the card must clearly disclose its expiration date, and the card or packaging must clearly disclose any fees.

But, all’s not lost. Consumers who still have these expired gift cards may be able to take legal action and recover the value of their expired funds. And twice in recent years, consumers have done just that.

In 2019, consumers took legal action against REI, claiming that the retailer expired gift cards after two years. In 2021, upset gift card recipients filed a similar class action lawsuit against AT&T, charging that the company sent new customers gift cards which expired after 150 days; and in some cases, AT&T sent the cards shortly before they expired, forcing the customer to use them sooner or lose them completely.

According to TopClassActions, attorneys are eager to assist gift card purchasers and recipients whose gift cards improperly expired before the time allowed by law. To take legal action, consumers must still have the expired gift card.

If you can check that box, then you’re generally qualified to apply for the lawsuit, but you also need to have a specific gift card to be eligible. Those gift cards have to be:

Issued on a prepaid basis

Redeemable at a specific business that sells products or services

Issued by a business that sells a product or service (does not include entertainment venues or theaters)

The following gift cards are not eligible:

Phone cards or Bed, Bath & Beyond cards

Reloadable gift cards

Prepaid debit or secured credit cards

Loyalty, reward or promotional cards

Gift certificates issued only in paper form

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Gary’s main beats for the ConsumerAffairs news team are travel and technology, including the hearing aid industry. (He’s also been a hearing aid user for over 15 years.) Prior to working here, he was a programming consultant for radio and TV stations in some 20 markets around the U.S., as well as a presentation developer for the likes of Jack Daniel's, Procter & Gamble, AT&T, and Columbia University.