Use The Gift Card Now or You’ll Lose it to the State’s Piggy Bank

January 10, 2008 By Debbie Dragon

Many people give and receive gift cards for Christmas. Did you ever stop to think about what happens to the money if you don’t use your gift card before it expires? The surprising answer is, if you don’t use the gift card within a certain amount of time, it may actually be considered the state’s money.

It’s referred to as “escheat”, when the unused funds are reverted into the state’s funds- but the actual time limit and laws vary from state to state. Each of the states has an act that involves unclaimed property- the escheat laws. Things like unclaimed gift cards, unclaimed safety-deposit boxes, uncashed checks, bank accounts that no one is using and the owners can’t be located, etc- all of these unclaimed property and monies eventually are given to the state- and apparently, there has been a huge revenue created by these unclaimed gift cards and such- to the point that the escheat laws are being re-examined within the states.

Some gift cards have expiration dates written on them, so it’s pretty easy to determine when you need to redeem the card by in order to ensure you keep your money. But what about the major retailers that have stopped printing expiration dates on their gift cards? Cards for stores like JC Penny, Home Depot, Costco, Wal-Mart and Target are issued with no expiration date. Doesn’t that mean you can redeem it anytime?

Actually, no.

Depending on the state you live in, you could very well show up at Wal-Mart with your gift card a few years after receiving it (maybe you lost it and didn’t find it until four years later when you re-arranged your living room and it was discovered hiding under the big screen tv or something) only to find out the card is no longer useable. The money on unclaimed gift cards is deposited into the state’s bank on the time table determined by the state.

There are a handful of states with no escheat laws- meaning you can redeem your gift cards 20 years after you receive them and you get to use the money because the retailers were not required to provide the money to the state. California, Massachusetts and Washington do not have escheat laws.

Find out about the state escheat laws in your own state regarding gift cards so you don’t miss out on your gift card redemption- or, run out the same day you get those gift cards and use them up!

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