Under New York’s gift card expiration law, any gift certificate sold in the state must stay valid for at least nine years from the date it was issued or the date money was last loaded onto it, whichever is later. The rule sits in General Business Law § 396-i, and it comes with a near-total ban on fees and a right to cash out small leftover balances at closed-loop retailers.
The Nine-Year Minimum
A gift card purchased in New York on or after December 10, 2022 cannot expire before nine years pass from issuance or the last reload. If the card carries an expiration date, that date must be printed clearly on the card itself.
The nine-year floor covers both physical and electronic gift certificates. It applies to closed-loop cards, which are tied to a single retailer or a group of stores sharing a brand, and to open-loop cards, which are issued through a payment network like Visa or Mastercard and work anywhere the network is accepted. Promotional cards are the one carve-out, and they get their own treatment further down.
Fees a Seller Can and Cannot Charge
New York bans essentially every fee that could chip away at a gift card’s balance. The statute prohibits activation fees, service fees, dormancy fees, administrative fees, handling fees, periodic fees, reload fees, and any other fee of any kind. The face value cannot drop simply because time passes or the card goes unused.
There is one narrow exception. An open-loop card, like a prepaid Visa gift card bought at a drugstore, may carry a single one-time activation or issuance fee. That fee must be reasonably related to the issuer’s cost and cannot exceed $9. After activation, no further fees of any type can be taken from the balance.
Cashing Out a Small Balance
When a closed-loop gift certificate has less than $5 remaining, the holder can ask the merchant to pay out that balance in cash, and the merchant must honor the request. You don’t have to hunt for a purchase that lines up with a $3.47 leftover.
This right does not extend to open-loop cards or to promotional gift certificates. For a bank-network prepaid card with a small remaining balance, federal Regulation E governs, and no equivalent cash-out right exists in New York law. For a regular store gift card, ask at the register once the balance dips below $5.
Promotional Cards Are Treated Differently
A promotional gift certificate is one the recipient did not pay for, such as a bonus card handed out with a purchase or a loyalty reward mailed to frequent customers. These fall outside the nine-year rule and can expire sooner. To qualify, the card must state on its face that it was issued for promotional purposes and must display its expiration date.
A card missing either of those markings is treated as a regular gift certificate with full nine-year protection, regardless of how the merchant labels it. If someone paid money for the card, it gets the standard protections.
If the Retailer Closes or Goes Bankrupt
A business running a closing-out sale or defunct business sale in New York must still accept valid, unexpired gift certificates as payment for goods and services, including items marked down during the liquidation. A “going out of business” banner does not release the retailer from honoring the card. This protection applies to personal, family, and household purchases.
Bankruptcy is a different situation. In Chapter 11 reorganization, a retailer often asks the court for permission to keep honoring gift cards because burning customer goodwill can wreck the reorganization. In a full liquidation, gift card holders typically become unsecured creditors and recover only a fraction of their balance, if anything. Nothing is guaranteed once a bankruptcy court is in the picture, so if a retailer is reportedly in financial trouble, spend the card sooner rather than later.
If a Store Refuses to Honor Your Card
Start at the store. Explain that the card has not expired and point to New York’s nine-year rule under General Business Law § 396-i. Bring proof of purchase or the issue date if you have them. Front-line employees often don’t know the law, and a calm explanation resolves most disputes on the spot.
If the store still refuses, file a consumer complaint with the New York State Attorney General’s Office. The AG’s consumer mediation program handles over 12,500 cases a year and can investigate businesses that break the gift certificate rules. Complaints can be submitted through the Attorney General’s consumer issues portal or by calling the OAG Help Line at 1-800-771-7755. The New York Department of State’s Division of Consumer Protection also tracks gift card complaints and publishes consumer alerts. A court can impose a civil penalty of up to $1,000 for each violation, whether the business charged an illegal fee, refused a valid card, or denied a proper cash-redemption request.
When the Balance Goes to the State
New York’s Abandoned Property Law requires businesses to turn over unredeemed gift certificate balances to the state after five years of inactivity. The funds go to the Comptroller’s Office of Unclaimed Funds, where the rightful owner can claim the money at any time with no deadline. That creates a gap worth knowing about: a card can still be valid for nine years under § 396-i even though the underlying funds may have transferred to the state after five years of dormancy.
If you try to use a card and the balance reads zero even though you never spent it, the retailer may have already remitted the funds. Search for unclaimed property through the New York State Comptroller’s website and file a claim to recover the money.