Gift Certificate Law and Legal Definition

Gift certificates generally are upfront payment in exchange for a certificate or card, which can be redeemed later for goods or services by the holder. Gift certificates are primarily governed by state laws, which vary by state.

Typically, gift certificates cannot be offered in a manner that is untrue or misleading, and in some states, gift certificates and gift cards sold by retail sellers for use with the seller and its affiliates cannot contain an expiration date or a service fee. In those states that do allow expiration dates, the typical rule is that they must be conspicuously displayed, and usually the card must not expire for at least one year after the date of issuance. If there is a fee or deduction for the card laying dormant longer than a certain period of time, those terms are generally also required to be disclosed on the certificate/card. Some states also require the unused amounts on gift cards to be turned over to the state's abandoned property agency.