Gift card escheat

Definition

The point at which an unredeemed balance stops being yours and becomes the state's.

Why It Matters

Outstanding cards are a liability a buyer usually inherits and rarely counts. Federal rules put a floor under them: the funds have to last at least five years, and the card and the funds run on two different clocks, so a card can expire while the money behind it may not. A state can go further, and one bans an expiration earlier than nine years and bans fees outright, yet the same state treats the balance as abandoned property after five years and takes it. The merchant loses the float four years before the card can lawfully die. Nothing in that statute says what a sale does: no successor rule, no security, no regulator, so the duty to honor the cards is whatever the purchase agreement makes it.