Shopify Gift Card Compliance: Expiration Laws by Region

Gift card expiration laws vary by region. The US CARD Act requires a minimum five-year validity period, California and New York prohibit expiration entirely, Canada's provinces generally ban expiration on monetary gift cards, Australia mandates a three-year minimum, and the UK requires clear disclosure of terms. Merchants selling across borders need to understand these differences.

This guide provides general information about gift card regulations. It is not legal advice. Laws change, interpretations vary, and your specific situation may differ. Consult a qualified attorney or your jurisdiction's consumer protection authority for advice specific to your business.

Gift card compliance might not be the most exciting topic for Shopify merchants, but getting it wrong carries real consequences: fines, chargebacks, negative reviews, and reputational damage. The rules differ depending on where your customers live, where your business is registered, and sometimes where the gift card was purchased. This guide covers the major regulatory frameworks so you can make informed decisions about how to configure your gift cards.

Why Compliance Matters

Three practical reasons to pay attention to gift card regulations:

Legal risk. Violating gift card laws can result in fines, penalties, and enforcement actions from consumer protection agencies. In some jurisdictions, customers can also pursue private claims.

Consumer trust. Customers who discover their gift card has expired or been reduced by fees are unlikely to buy from you again. And they're likely to tell others about the experience. Clear, compliant terms build trust.

Accounting clarity. Knowing whether and when gift cards can expire affects how you account for gift card liability on your balance sheet. Clearer rules mean cleaner books.

United States: Federal Baseline (CARD Act)

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (commonly called the CARD Act) sets the federal floor for gift card regulations in the United States.

Key Federal Rules

• Minimum validity period. Gift cards must remain valid for at least five years from the date of issuance or the date funds were last loaded onto the card.
• Dormancy fee restrictions. Inactivity or dormancy fees are only permitted if the card has been inactive for at least 12 months, the fee is limited to one per month, and the fee terms were clearly disclosed before purchase.
• Disclosure requirements. Any fees and the expiration date (if applicable) must be clearly stated on the card or its packaging.

The CARD Act applies broadly to most gift cards, but certain exemptions exist for cards usable only at specific locations or for specific goods and services without a set monetary denomination.

For merchants, the practical takeaway is straightforward: if you sell to US customers, your gift cards should remain valid for at least five years, and you should avoid dormancy fees unless you have a specific, disclosed policy that meets all three conditions.

United States: State Variations

Many US states impose rules that are stricter than the federal baseline. When state law is more protective than federal law, the state law applies.

California

California has some of the strongest gift card protections in the country:

• Gift cards with a monetary value generally cannot have an expiration date.
• Dormancy and service fees are prohibited on most gift cards.
• If the remaining balance on a gift card falls below $10, the holder can request a cash redemption.

In California, the safest approach for merchants is to set no expiration and charge no fees.

New York

New York similarly restricts gift card expiration:

• Gift certificates (which includes most store gift cards under New York law) generally cannot expire.
• Service fees on gift certificates are prohibited.

The definitions in New York law can be nuanced, so merchants with significant New York customer bases should verify how their specific gift card products are classified.

Other Notable States

Several other states provide additional protections beyond the federal baseline:

• Massachusetts generally prohibits expiration on gift certificates and restricts dormancy fees.
• New Jersey prohibits expiration and fees on most gift cards.
• Connecticut requires gift cards to be valid for at least five years and restricts fees.
• Washington prohibits expiration on most gift cards and certificates.

This list is not exhaustive. The National Conference of State Legislatures (NCSL) maintains a comprehensive database of gift card legislation by state. If you sell to customers across multiple states, the conservative approach is to follow the most restrictive state's rules for all customers.

Canada: Provincial Regulations

In Canada, gift card regulation falls primarily to the provinces. The general trend across Canadian provinces is strong consumer protection with prohibitions on expiration.

Alberta

In Alberta, gift cards with a monetary value cannot have an expiration date (in effect since November 2008). This applies to both physical and digital gift cards.

British Columbia

Most gift cards in British Columbia cannot expire. Exceptions may apply to certain promotional cards, but standard monetary gift cards must remain valid indefinitely.

Ontario

Ontario's rules include some nuances:

• Standard gift cards with a monetary value cannot expire.
• Mall gift cards (cards usable at multiple retailers within a shopping center) maintain their value for at least 15 months. After that period, a dormancy fee of up to $2.50 per month may apply.

New Brunswick

Gift cards in New Brunswick cannot expire and cannot be subject to inactivity fees.

General Canadian Guidance

Most Canadian provinces prohibit expiration on monetary gift cards. Merchants selling to Canadian customers should generally set gift cards to never expire and avoid post-purchase fees. Check with your province's consumer protection office for specifics.

United Kingdom

The UK does not have a blanket prohibition on gift card expiration, but consumer protection laws still apply.

Key UK Rules

Under the Consumer Rights Act 2015 and related consumer protection regulations:

• Gift card terms (including any expiration period) must be clearly disclosed at the point of sale.
• Terms that are considered "unfair" under consumer contract law can be challenged and potentially voided.
• While there is no mandated minimum validity period, most major UK retailers set gift card validity at 12 to 24 months. A very short validity period (such as 30 days) could be considered unfair.

Practical Guidance for UK Sales

If you sell to UK customers, set a reasonable validity period (12 months or longer is common practice), disclose the expiration date clearly before purchase, and avoid hidden fees. Transparency is the key principle in UK gift card regulation.

European Union

The EU does not have unified gift card legislation. Regulations vary by member state.

General EU Principles

• Member states set their own rules regarding gift card expiration and fees.
• In Germany, gift card expiration terms must be "reasonable," which courts have generally interpreted as three years or more from the end of the year of issuance.
• The general EU principle requires clear disclosure of all terms and conditions at the point of sale.
• Consumer protection directives across the EU broadly prohibit unfair contract terms, which can apply to overly restrictive gift card policies.

Practical Guidance for EU Sales

For merchants selling across EU member states, the conservative approach is to set validity periods of at least three years, disclose all terms clearly, and avoid post-purchase fees. Check the consumer protection regulations in each member state where you have significant sales volume.

Australia

Australia implemented specific gift card regulations through amendments to Australian Consumer Law, effective November 2019.

Key Australian Rules

• Minimum validity period. All gift cards must be valid for at least three years from the date of purchase or the date funds were last loaded.
• Post-purchase fees. Fees charged after the gift card is purchased are generally prohibited. This includes dormancy fees, service fees, and account-keeping fees.
• Disclosure. The expiry date must be prominently displayed on the gift card itself.

Practical Guidance for Australian Sales

If you sell to Australian customers, set gift card validity to at least three years and do not charge any post-purchase fees. Display the expiry date clearly on the card.

How to Configure Gift Cards in Shopify

Shopify's default setting for gift cards is no expiration, which is the safest default for compliance purposes. Here's how to verify and configure your settings:

1. In your Shopify admin, go to Settings > Gift cards.
2. Review the expiration setting. "Gift cards never expire" is the default and the recommended setting for most merchants.
3. If you do set an expiration period, make sure it meets the requirements of every jurisdiction where your customers live. For US merchants, that means at least five years. For merchants with Australian customers, at least three years. For merchants with California or New York customers, no expiration at all.

If you manage gift cards at scale using bulk creation tools, the expiration setting applies to all cards created through Shopify's system. Keep your Shopify expiration setting aligned with your most restrictive customer jurisdiction.

A Compliance Checklist for Merchants

While this guide covers the major frameworks, compliance ultimately depends on your specific business and customer base. Use this as a starting point:

• Know where your customers are. If you sell internationally or across US states, identify your most restrictive jurisdictions.
• Default to no expiration. Unless you have a specific business reason to set expiration dates, "never expire" is the safest and simplest setting.
• Avoid post-purchase fees. Dormancy, inactivity, and service fees are prohibited or restricted in most jurisdictions. Unless you have legal advice confirming your fee structure is compliant, don't charge them.
• Disclose terms clearly. Whatever your gift card terms are, display them prominently at the point of sale. Transparency is a common requirement across all jurisdictions.
• Keep records. Maintain clear records of when gift cards were issued, their values, and their terms. Good code management practices support compliance by ensuring you can trace any card back to its creation details.
• Review periodically. Laws change. Set a reminder to review gift card regulations annually, especially if you expand to new markets.
• Consult a professional. For questions about your specific obligations, consult an attorney familiar with consumer protection law in your jurisdictions.

Getting Started

Managing gift card compliance is easier when you have clear records of every card created. BatchCard captures full codes at creation, organizes cards into searchable batches with tags and notes, and exports complete records for auditing and accounting. If you're issuing gift cards at scale, having a clear paper trail matters for both compliance and peace of mind.