How Gift Cards Work in the US
From the moment a card is purchased to the last cent redeemed, here is what every US consumer should understand about how gift cards function and what protections apply.
Checking Your Balance
Most gift cards provide at least two ways to check the remaining balance. The most common methods are the issuer's website, a toll-free phone number printed on the back, and the point-of-sale terminal at a participating store.
For store-branded cards, the retailer's website typically has a dedicated balance check page. You will usually need the card number and, for security, the PIN located under the scratch-off area on the back of the card.
Prepaid open-loop cards — those carrying a major payment network logo — can often be checked through the network's portal as well as the card issuer's site. Packaging usually specifies which URL to use.
What to do if a balance seems wrong
If the balance shown does not match your expected remaining amount, contact the card issuer directly. Keep the original purchase receipt, which provides a timestamp and transaction record. Some issuers can pull a full transaction history for the card, which can reveal unauthorized charges or processing errors.
Quick tip
Photograph the back of the card before using it. If the physical card is damaged or lost, having the number and PIN on file makes balance checks and issuer contact far easier.
Balance check methods
- Issuer website (most common)
- Toll-free phone number on card back
- In-store point-of-sale terminal
- Mobile app (select issuers)
Redeeming at Retail Stores
Using a gift card in a physical store is straightforward in most cases. When you reach the register, inform the cashier you are paying with a gift card, or swipe or insert the card into the payment terminal when prompted.
The terminal reads the magnetic stripe or barcode and deducts the purchase amount from the stored balance. If your purchase total is less than the card balance, the remaining value stays on the card for future use. If the total exceeds the card balance, you will need to pay the difference using another method.
Splitting a payment at the register
Not all retailers handle split payments the same way. Some terminals automatically ask for a second payment method when a gift card balance is insufficient. Others require the cashier to manually process the split. If unsure, tell the cashier your approximate balance before the transaction begins so they can set up the payment correctly.
Magnetic stripe vs. barcode cards
Older gift cards use a magnetic stripe on the back. Newer cards from many retailers use a barcode or QR code. Both types are read by the store's terminal. If a card fails to scan, the cashier can usually enter the card number manually.
The CARD Act and Federal Protections
The Credit Card Accountability Responsibility and Disclosure Act of 2009 added Title IV, which specifically addresses gift card consumer protections. These rules are implemented through federal regulation and enforced by federal consumer protection authorities.
Five-Year Expiration Minimum
A gift card sold to a consumer cannot expire until at least five years after the purchase date or the date on which value was last loaded. If a card has an expiration date, it must appear clearly on the card face.
Dormancy Fee Restrictions
An inactivity or dormancy fee can only be assessed after 12 consecutive months during which no transactions have occurred on the card. The issuer may charge only one fee per month.
Disclosure Requirements
All fee terms, including the amount of any dormancy fee and the conditions under which it applies, must be clearly disclosed on the card itself or on the packaging at the point of sale.
Known Exemptions
Certain cards are not covered by the CARD Act gift card provisions — including loyalty, reward, or promotional program cards where no money was paid. Reloadable prepaid cards used for general spending may also operate under different rules.
State laws may provide additional protections beyond the federal minimums. Some states have stricter rules on dormancy fees or longer expiration minimums. Checking your state's consumer protection laws gives you a fuller picture of your rights.
Lost or Stolen Gift Cards
Unlike credit or debit cards, gift cards do not have the same standardized legal protections when lost or stolen. The CARD Act does not require issuers to replace lost or stolen gift cards. However, many major retailers and card issuers have voluntary replacement policies.
Steps to take immediately
Contact the card issuer as soon as you realize the card is missing. Have the original purchase receipt ready, as it typically contains the card number and purchase timestamp. Some issuers can freeze the remaining balance to prevent further use while they investigate.
What issuers typically require
To process a replacement request, most issuers will ask for the card number, the original purchase receipt, and sometimes a government-issued ID. The process can take several business days. Not all issuers offer replacements, and some charge a fee for the replacement card.
Protecting yourself in advance
Register the card on the issuer's website if the option is available. Registered cards are easier to replace because the issuer can verify ownership. Keep the original packaging and receipt until the card is fully used.
Act quickly
If you suspect a gift card has been stolen and used, contact the issuer the same day. Once a balance is spent, recovery becomes significantly more difficult even with documentation.
Gift Card Scam Awareness
Gift card scams are consistently among the most reported consumer fraud types in the United States. Understanding how these scams are structured is the most effective way to avoid them.
Impersonation Calls
A caller claims to be from a government agency, utility, or well-known business and demands payment in gift cards. No legitimate organization accepts gift cards as payment for bills, taxes, or fines.
Prize & Lottery Scams
Victims are told they have won a prize but must pay fees using gift cards to claim it. Legitimate prize programs do not require winners to pay fees of any kind before receiving winnings.
Rack Tampering
Scammers in retail stores peel back the protective covering on gift card PINs, record the numbers, and replace the covering. When a consumer activates the card, the scammer drains the balance.
Romance Scams
Online relationships that develop quickly and end with a request for gift card payments are a well-documented fraud pattern, frequently cited in federal consumer protection reports.
If you believe you have been targeted by a gift card scam, report it to federal consumer protection authorities and to your state's attorney general office. You can also report to the card issuer directly, as many issuers have fraud investigation teams.
Questions About a Specific Situation?
This resource covers general information. For specific questions, reach out and we will point you to the right next step.