Restaurant gift cards are a good gift and occasionally a good deal, but they come with more myths than most people realize. In the US, federal rules mean the money on most gift cards cannot expire for at least five years, and inactivity fees are tightly limited. What the rules cannot do is protect a card if the restaurant closes, or stop a scammer who talks you into buying cards and reading out the numbers. The facts below help you buy, give and use restaurant gift cards without losing value.
Key takeaways
- Under federal rules, gift card funds generally cannot expire for at least five years.
- Inactivity fees are allowed only after a year of non-use, at most once a month, and must be disclosed.
- A card is only as reliable as the restaurant behind it, so use cards promptly.
- Anyone who asks you to pay them with gift card numbers is running a scam.
Restaurant gift cards: myth vs fact at a glance
| Myth | Fact |
|---|---|
| Restaurant gift cards expire after a year | Funds generally must last at least five years from purchase or last reload |
| Fees can eat the balance at any time | Inactivity fees need a year of non-use, at most one per month, with clear disclosure |
| A gift card is as safe as cash | It can lose value if the business closes or goes bankrupt |
| Cut-price cards online are a bargain | Cards from auction sites may be fake or stolen |
| Real companies sometimes ask for payment by gift card | Only scammers ask for payment by gift card |
Myth 1: Restaurant gift cards expire after a year
Fact: Federal rules set a much longer minimum. The Federal Reserve announced the final rules restricting gift card fees and expiration dates in March 2010, effective August 22, 2010. Under them, the expiration date for funds on a gift card must be at least five years after the card was issued, or five years after money was last loaded.
The rules cover retail gift cards, which work at a single merchant or affiliated group, and network-branded cards usable anywhere the brand is accepted. The Federal Trade Commission’s gift card tips explain that retail gift cards include those redeemed at the retailers and restaurants that sell them, and that if a card shows an earlier expiration date, the money can be moved to a replacement card at no cost.
State rules can add further protections, so check your state consumer agency if a card looks out of date.
Myth 2: Fees can quietly drain your balance
Fact: Under the same federal rules, dormancy, inactivity and service fees are prohibited unless the card has not been used for at least one year, no more than one such fee is charged per month, and the fees are clearly and conspicuously disclosed. The FTC adds that the card must clearly show its expiration date, and the card or packaging must clearly disclose any fees.
The practical move is to read the back of the card or the packaging before you buy, and to use the card within its first year if you can.
Myth 3: A gift card is as safe as cash
Fact: A gift card depends on the business that issued it. The FTC notes that a card from a company that files for bankruptcy or goes out of business may be worth less than expected, and that if a business closes the location near you, it may be hard to find another place to use it. It also suggests considering the financial condition of a retailer or restaurant before buying its cards.
For budget diners, the lesson is simple: treat a restaurant gift card as something to spend soon, not to save. If you hold cards from several places, plan a meal around the oldest one first.
Myth 4: Discounted cards from resale sites are a smart deal
Fact: Some discounts are real, but the risk is high. The FTC’s guidance on avoiding gift card scams advises sticking to stores you know and trust and avoiding online auction sites, because cards there may be fake or stolen. If you want restaurant savings, legitimate routes like restaurant loyalty programs or early-bird specials carry no such risk.
When you buy a card in a shop, the FTC suggests checking that the protective stickers are intact and the PIN is not showing, and keeping a photo of the card and the receipt.
Myth 5: A real company might ask you to pay with a gift card
Fact: No real business or government agency will ever tell you to buy a gift card to pay them, according to the FTC. Gift card scams start with a call, text, email or social media message. The scammer creates urgency, tells you which card to buy and where, then asks for the card number and PIN, which lets them take the money even while you still hold the card.
If you have already given card numbers to a scammer, the FTC advises reporting it to the card company right away, asking for your money back, and reporting it at ReportFraud.ftc.gov.
Frequently asked questions
Do the federal rules apply to promotional restaurant cards?
The rules are aimed at gift cards that people buy. Bonus or promotional cards handed out by a restaurant often carry their own terms and shorter limits, so read the conditions printed on the card and use them quickly.
What should I do if a restaurant refuses an unexpired gift card?
Ask to speak to a manager and check the terms on the card. If the business has closed or changed hands, contact the company that issued the card. You can also contact your state consumer protection office.
Are restaurant gift cards a good way to save money?
They can be when a restaurant offers a genuine bonus and you were going to eat there anyway. They are a poor deal if the card goes unused. Count them in your eating-out budget like cash.
Spend them, do not save them
Keep a photo of every card and receipt, use cards within a year, and never give card numbers to anyone who asks for payment. For more ways to stretch your dining money, see our deals and discounts guides.
