Do Gift Cards Expire in Canada?
Whether it’s for Christmas, birthday or even a corporate reward, gift cards are an excellent option. No longer held in paper format but as a plastic card, gift cards offer a flexible and convenient solution.
However, it’s so easy to tuck the card into your wallet and then forget all about it. Upon discovery, what’s the best course of action? Can you still use it in the store many months later or will you have to forfeit the value?
Here’s a look at everything you need to know about the law and expiry of gift cards in Canada.
What the law says
There are two different types of gift card available in Canada, those issued by stores and those from malls. The law treats each of these slightly differently so it’s important to understand which type you hold.
Store-issued gift card
The Consumer Protection Act banned expiry dates on store-issued gift cards on 1 October 2007. This means that no matter how long it’s been you can still use whatever credit was loaded onto the card.
In addition, stores are not permitted to charge dormancy fees, a way of eroding the gift card’s balance. They are however allowed to make a charge to customize or replace missing cards.
The sole exceptions to this law for store gift cards are those issued for charity and those which relate to a single, specified service (such as a manicure).
Mall-issued gift cards
Gift cards issued by malls rather than individual stores are not forced to comply with the Consumer Protection Act to the same extent.
Initially, any gift card is valid for 15 months; at the end of this period, the individual can ask for the gift card to be extended for a further three months.
If after 18 months, or 15 months if no extension is requested, the value cannot be simply wiped off. Instead, the mall is permitted to start charging a dormancy fee but this must not exceed $2.50 per month. In addition, these fees must be clearly visible in the terms and conditions of the gift card.
Don’t lose out
With the introduction of the Consumer Protection Act more than a decade ago, gift cards are now the ideal option, providing real flexibility. If you have a store gift card, you don’t need to lose out no matter how long you’ve held onto the card. Even if you have a mall-issued gift card, the dormancy fees can only be applied if the terms are clearly visible.
Unlike over-sized paper vouchers, gift cards can easily be stored in a wallet rather than stuffed in the back of a drawer. This means that it’s far easier to use them whenever you’re out shopping, so the chances are that you won’t be holding on to the gift card for too long anyway!
