Minnesota Bans Gift Card Expiration Dates Outright. The Federal Rule That Allows Them Is the One That Covers Your Emailed Gift Code.

Minnesota’s gift card statute is, on its face, one of the strictest in the country. It does not cap expiration dates. It does not regulate dormancy fees. It bans both, without qualification, without a grace period, and without a dollar threshold. Minnesota enacted it in 2007 — two years before Congress reached the subject in 2009.

The trap is that the prohibition is only as wide as the definition sitting above it, and that definition is narrow in ways that are easy to miss. It reaches a tangible record. It requires that the record promise goods or services “to the value shown in the record,” a phrase the Court of Appeals has read to mean cash value. And it excludes six categories outright, including the bank-issued cards that carry the most fee risk.

The result is a two-layer system in which the stricter Minnesota rule governs the plastic card in your wallet, and the more permissive federal rule — the one that allows a five-year expiration and a monthly inactivity fee — is the one most likely to govern the gift code someone emailed you.

What does Minn. Stat. § 325G.53 actually prohibit?

One sentence. Subdivision 2 reads in full:

It is unlawful for any person or entity to sell a gift certificate that is subject to an expiration date or a service fee of any kind, including, but not limited to, a service fee for dormancy.

There is no exception for a long expiration date, no exception for a disclosed fee, and no de minimis carve-out. If the instrument is a “gift certificate” as the statute defines that term, the seller cannot attach either an expiration date or a fee. Compare the federal rule below, which permits both under conditions.

The definition, in subdivision 1(a), is where the work happens:

“Gift certificate” means a tangible record evidencing a promise, made for consideration, by the seller or issuer of the record that goods or services will be provided to the owner of the record to the value shown in the record and includes, but is not limited to, a gift card, stored-value card, store card, or a similar record or card that contains a microprocessor chip, magnetic stripe, or other means for the storage of information, and for which the value is decreased upon each use.

Subdivision 1(b) defines “affiliate” for purposes of the exclusions. That is the whole of the definitional apparatus — there is no separate definitions section for gift certificates elsewhere in chapter 325G. (Section 325G.52, which sits next to it, is the attorney general’s telemarketing-fraud outreach network and has nothing to do with gift cards.)

Why “the value shown in the record” decides most cases

Because a seller who wants an expiration date does not argue that expiration dates are lawful. The seller argues that what it sold was not a gift certificate.

That is exactly what happened in Wells v. Holiday Companies, Inc., 862 N.W.2d 492 (Minn. App. 2015) — the one published Minnesota appellate decision construing § 325G.53. Wells bought a $7.99 car wash at a Holiday Stationstore and received a receipt printed with a car-wash code and the words “Car Wash Good for 30 Days.” He never used it. He sued on behalf of a putative class, arguing the receipt was a gift certificate and the 30-day expiration violated subdivision 2.

The case had already been up once. On the first appeal the Court of Appeals reversed a Rule 12 dismissal, holding the complaint stated a claim. Wells v. Holiday Cos., No. A12-1476, 2013 WL 777384 (Minn. App. Mar. 4, 2013), review denied (Minn. May 21, 2013). After discovery, the district court granted summary judgment for Holiday, and the second appeal — the published one — affirmed.

The parties narrowed the dispute to a single element. The district court had found that the receipt was a tangible record, that it did evidence a promise, that Wells had paid consideration, that it fit the statute’s non-exhaustive list as a means of storing information, and that its value decreased to zero upon use. Everything but “to the value shown in the record.”

The Court of Appeals held that “value,” in that phrase, means cash value:

If the legislature intended the definition of a gift certificate to include a tangible record promising that a certain good or service would be provided to the holder of the record, then it would not have been necessary for the legislature to include the phrase “to the value shown in the record.”

862 N.W.2d at 497. And, more directly: “In that context, the plain and ordinary meaning of ‘value’ is ‘cash value.’” Id.

Applied to the facts, the code was redeemable only for the specific car wash purchased — not for $7.99 of anything Holiday sold. That the customer could redeem it later even if the price had gone up, and that Holiday had an unwritten internal practice of reissuing or refunding expired codes, did not convert it into a cash-value instrument. Nor did Holiday’s practice of charging sales tax on the car wash itself, which the court treated as confirmation that the customer had bought a taxable service rather than a certificate.

The practical takeaway is not about car washes. It is that a prepaid voucher for one specific thing is not a gift certificate in Minnesota. A record that says “one 60-minute massage,” “two adult admissions,” or “one oil change” is outside § 325G.53 and may carry an expiration date. A record that says “$75” is inside it and may not.

Does § 325G.53 cover an emailed gift code?

The statute says “tangible record.” No published Minnesota appellate decision resolves whether a purely electronic gift card — a code delivered by email, with no card, no paper, and nothing to hold — satisfies that requirement. Wells did not reach it; the receipt there was printed, and the district court’s finding that it was a tangible record was never contested on appeal.

The text supplies arguments in both directions, and they are worth stating plainly rather than papering over. On one side, “tangible” is a word the legislature chose and courts presume every word does work — the same interpretive move the Wells court made with “to the value shown in the record.” The illustrative list that follows reinforces a physical reading: a gift card, a stored-value card, a store card, a card with a microprocessor chip or magnetic stripe. Every item on that list is an object. On the other side, the list is expressly non-exhaustive, and a code is at least arguably evidenced by some record.

Until a Minnesota court answers it, the safer assumption for a consumer is that the emailed code may not be protected by the state ban — and the safer assumption for a Minnesota retailer is that a court could hold otherwise. What is not in doubt is that the federal rule reaches electronic instruments expressly, which is the subject of the next two sections.

Which cards does the statute exclude?

Subdivision 3 removes six categories from the section’s reach. All six, in the statute’s own order:

1. Cards distributed for loyalty, promotional, award, incentive, rebate, or other similar purposes without any money or other tangible thing of value given by the consumer in exchange.
2. Cards sold below face value or at a volume discount to employers, or to nonprofit and charitable organizations for fundraising purposes.
3. Debit cards or other legal access devices used to access a deposit account and subject to the federal disclosure rules in the Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq., and Regulation E.
4. Cards issued by an employer to an employee in recognition of services performed.
5. Cards issued by a bank, bank and trust, savings bank, savings association, or credit union — federally or state chartered — or by an operating subsidiary or other affiliate of one, that can be used at multiple sellers of goods and services, provided that the issuer discloses any expiration date and fee associated with the card.
6. Prepaid calling cards used to make wireline or wireless calls.

Clause (5) is the one that matters most in practice, because it is the clause the general-purpose network gift cards — the Visa, Mastercard, and American Express cards sold on a rack — are designed to fall into. Where such a card is in fact issued by a bank or credit union (or an operating subsidiary or affiliate of one) and is usable at multiple sellers, Minnesota’s flat ban does not reach it, so long as the issuer discloses any expiration date and fee. Minnesota did not prohibit expiration and fees on those cards. It conditioned the exclusion on disclosure and left the substantive limits to federal law.

Note also that clause (5) is a disclosure condition, not a disclosure safe harbor for anyone else. A single-merchant store card is not saved by a disclosed expiration date. Disclosure only matters for the bank-issued multi-merchant card.

What does federal law require, and where does it fill the gap?

Public Law 111-24, enacted May 22, 2009, added § 915 to the Electronic Fund Transfer Act, codified at 15 U.S.C. § 1693l–1; Regulation E implements it at 12 C.F.R. § 1005.20. The federal rule differs from Minnesota’s in structure: it permits expiration and permits fees, subject to conditions.

Expiration. 15 U.S.C. § 1693l–1(c) makes it unlawful to sell or issue a gift certificate, store gift card, or general-use prepaid card subject to an expiration date, unless the expiration date is not earlier than five years after issuance (or after funds were last loaded) and the terms of expiration are clearly and conspicuously stated. Regulation E adds detail at 12 C.F.R. § 1005.20(e): the issuer must have policies giving consumers a reasonable opportunity to buy a card with at least five years remaining; the funds must not expire before the later of five years from issuance/last load or the card’s own expiration date; the card must disclose the funds’ expiration date and a toll-free number for a replacement; and no fee may be charged to replace an expired card or otherwise deliver the remaining balance, unless the card was lost or stolen.

Fees. 15 U.S.C. § 1693l–1(b) prohibits dormancy, inactivity, and service fees unless there has been no activity for the 12-month period ending on the date the fee is imposed, the disclosures are made, and not more than one fee is charged in any given month. Regulation E states the same three conditions at 12 C.F.R. § 1005.20(d), and defines “activity” at § 1005.20(a)(7) as any action increasing or decreasing the underlying funds, other than the imposition of a fee or an error correction or reversal.

Coverage. The federal definitions are broader than Minnesota’s in medium and narrower in one respect that matters. Regulation E defines “gift certificate,” “store gift card,” and “general-use prepaid card” as a “card, code, or other device” issued on a prepaid basis primarily for personal, family, or household purposes. 12 C.F.R. § 1005.20(a)(1)–(3). The word “code” resolves the electronic-gift-card question that Minnesota law leaves open. The statute is to the same effect: 15 U.S.C. § 1693l–1(a)(2)(B) defines “gift certificate” as an “electronic promise.”

But 12 C.F.R. § 1005.20(b)(5) excludes any card, code, or device “[i]ssued in paper form only,” and the statutory exclusion at 15 U.S.C. § 1693l–1(a)(2)(D)(v) says the same. A paper gift certificate is outside the federal rule entirely. It is squarely inside Minnesota’s, which requires a tangible record and says nothing about paper.

Regulation E’s other exclusions, at § 1005.20(b), track the statute: cards useable solely for telephone services; reloadable cards not marketed or labeled as a gift card; loyalty, award, or promotional gift cards; cards not marketed to the general public; and cards redeemable solely for admission to events or venues (or for goods and services obtained in conjunction with admission).

Which rule governs which card?

The two regimes are not alternatives. Where both apply, both apply — and Minnesota’s is the binding constraint, because it forbids what the federal rule merely conditions.

Can Minnesota’s stricter rule survive federal preemption?

Yes, and Congress said so in terms that name this exact subject. 15 U.S.C. § 1693q provides:

This subchapter does not annul, alter, or affect the laws of any State relating to electronic fund transfers, dormancy fees, inactivity charges or fees, service fees, or expiration dates of gift certificates, store gift cards, or general-use prepaid cards, except to the extent that those laws are inconsistent with the provisions of this subchapter, and then only to the extent of the inconsistency. A State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection afforded by this subchapter.

A flat ban on expiration dates affords more protection than a five-year floor. A flat ban on service fees affords more protection than a fee permitted after twelve months of inactivity. Under the second sentence, neither is inconsistent. Section 1693q also preserves a mechanism by which the Bureau may determine, on its own motion or on request, whether a state requirement is inconsistent or affords greater protection — a route to a formal determination, not a default rule of displacement.

If the balance is never spent, does the state take it?

No. Minnesota’s unclaimed property act has an express carve-out, and it is easy to miss because it sits at the end of a subdivision about miscellaneous personal property. Minn. Stat. § 345.39, subd. 1, closes with:

“Intangible property” does not include gift certificates, gift cards, or layaway accounts issued or maintained by any person in the business of selling tangible property or services at retail and such items shall not be subject to this section.

So the three-year abandonment presumption in that subdivision does not reach a retailer’s unredeemed gift card balances. The retailer keeps them on its own books rather than remitting them to the commissioner of commerce.

The 2026 Legislature reinforced the boundary from an unexpected direction. Laws 2026, ch. 124, art. 6, § 1 added a “virtual currency” definition to Minn. Stat. § 345.31 for the unclaimed property act, and expressly provided that virtual currency “does not include . . . a loyalty card or gift card.”

Combine that with § 325G.53. The card cannot expire. The balance cannot be eroded by a dormancy fee. And the state will not escheat it. In Minnesota, a covered gift card balance is an obligation that simply sits there, indefinitely, owed to whoever holds the card. That is a stronger consumer position than most people assume — and a longer-tailed liability than most retailers plan for.

What can a consumer actually recover?

Subdivision 4 is one sentence: “The remedies of section 8.31 apply to violations of this section.”

Section 8.31 is the attorney general’s enforcement statute. Two of its provisions matter here.

Subdivision 3 gives the attorney general injunctive relief and authorizes a court to make a violator pay “a civil penalty, in an amount to be determined by the court, not in excess of $25,000,” deposited in the general fund.

Subdivision 3a is the private-remedies provision — the private attorney general statute:

In addition to the remedies otherwise provided by law, any person injured by a violation of any of the laws referred to in subdivision 1 may bring a civil action and recover damages, together with costs and disbursements, including costs of investigation and reasonable attorney’s fees, and receive other equitable relief as determined by the court.

Here is the detail that decides gift card cases before they start. A claim brought under § 325G.53 reaches § 8.31, subd. 3a, only through subdivision 4’s cross-reference — and it therefore carries the public-benefit requirement the Supreme Court read into § 8.31 in Ly v. Nystrom, 615 N.W.2d 302 (Minn. 2000): “we hold that the Private AG Statute applies only to those claimants who demonstrate that their cause of action benefits the public.” 615 N.W.2d at 314.

The bypass that exists elsewhere in Minnesota consumer law is not available. Minn. Stat. § 325F.70, subd. 3, gives a consumer injured “by a violation of sections 325F.68 to 325F.70” a direct action and declares that “[a]n action brought under this section benefits the public” — but by its own terms it reaches only the Consumer Fraud Act sections, not § 325G.53. The mechanics of that split are worked through in Minnesota’s consumer protection statutes and who they actually pay and in the private attorney general statute.

That is why Wells was pleaded as a putative class action, and why gift card claims generally are. A single consumer suing over one $50 card that expired has a genuine problem establishing that the suit benefits the public. A claim challenging a seller’s standard practice across every card it issues does not. Where a fee-shifting statute applies and where it does not is mapped in Minnesota’s attorney fee-shifting statutes.

What to do, in order

If a merchant refuses to honor a gift card. Establish first which regime governs: single merchant or multiple, stated dollar amount or stated item, plastic or paper or code, bank-issued or merchant-issued. That classification, not the merchant’s explanation, determines the answer. Keep the card, the packaging, the receipt, and any terms — Regulation E requires several disclosures to appear on the card or code itself, and the absence of a required disclosure is its own violation.

If the card was bank-issued and multi-merchant. Minnesota’s ban probably does not apply. The federal five-year floor and one-fee-per-month limit do, along with the free-replacement rule in 12 C.F.R. § 1005.20(e)(4) if the card expired while funds remained.

If the merchant says the balance escheated to the state. For a retailer’s own gift card, that is not how Minnesota’s unclaimed property act works. See § 345.39, subd. 1.

If the practice is systemic. The claim is worth more as a class claim than as an individual one, for the public-benefit reason above and for the ordinary reason that a $50 balance does not support the cost of litigation. Minnesota’s other chapter 325 consumer statutes are not all built this way — some supply a damages remedy directly instead of routing through § 8.31, which changes the calculus entirely. Compare Minnesota’s home solicitation sales statute and the Truth in Repairs Act.

If you issue gift cards in Minnesota. The question to ask before printing anything is not “how long may the card last.” It is “what does the record say it is worth.” If the answer is a dollar figure, § 325G.53 applies and neither an expiration date nor a fee is available at any length or any amount. If the answer is a specific good or service, Wells is on your side — and the drafting should say so on the face of the record.

The observation

Section 325G.53 is a one-sentence prohibition attached to a definition that does nearly all the work, and in the nineteen years since enactment the Minnesota appellate courts have construed that definition in a single published decision. That is an unusual posture for a consumer statute: an absolute rule with almost no case law about its boundaries, sitting alongside a federal scheme that is far more detailed and far more permissive.

The consequence is that outcomes here turn on classification rather than on conduct. Whether an expiration date is lawful in Minnesota does not depend on how long it is, whether it was disclosed, or whether the consumer was harmed. It depends on whether the thing the consumer bought promised a dollar amount or promised a car wash. That is not a distinction most people would guess from reading subdivision 2 — which is the reason to read subdivision 1 first.

Madgett Law, LLC represents Minnesota consumers in disputes under the state’s consumer protection statutes and their federal counterparts, including claims under chapter 325 and the Electronic Fund Transfer Act, and advises Minnesota businesses on whether the instruments they sell fall inside or outside § 325G.53 before they are printed. If a gift card or stored-value instrument is at issue, the card, its packaging, and the terms as issued are the place to start. Send us a message or call 612-470-6529.

Sources: Minn. Stat. § 325G.53 (subd. 1(a), definition of “gift certificate” — “tangible record,” “to the value shown in the record,” and the non-exhaustive list including gift card, stored-value card, store card, and cards with a microprocessor chip or magnetic stripe; subd. 1(b), definition of “affiliate”; subd. 2, the prohibition on selling a gift certificate subject to an expiration date or a service fee of any kind including a dormancy fee; subd. 3, clauses (1)–(6), the six exclusions — loyalty/promotional/award/incentive/rebate cards given without consideration, cards sold below face value or at volume discount to employers or nonprofits for fundraising, EFTA-covered deposit access devices, employer-to-employee recognition cards, bank- and credit-union-issued multi-merchant cards where the issuer discloses any expiration date and fee, and prepaid calling cards; subd. 4, “The remedies of section 8.31 apply to violations of this section”; history line 2007 c 93 s 1). Minn. Stat. § 325G.52 (telemarketing-fraud consumer education outreach network — confirmed to contain no gift certificate definitions). Minn. Stat. § 8.31, subd. 3 (attorney general injunctive relief and civil penalty “not in excess of $25,000”) and subd. 3a (private remedies: damages, costs and disbursements including costs of investigation and reasonable attorney’s fees, and equitable relief). Minn. Stat. § 325F.70, subd. 3(a) (direct consumer action for violations of §§ 325F.68 to 325F.70 and the sentence “An action brought under this section benefits the public” — cited to show its scope does not reach § 325G.53). Minn. Stat. § 345.39, subd. 1 (three-year abandonment presumption for miscellaneous intangible personal property, and the closing sentence excluding gift certificates, gift cards, and layaway accounts issued or maintained by a retail seller). Laws 2026, ch. 124, art. 6, § 1 (adding Minn. Stat. § 345.31, subd. 10, defining “virtual currency” and excluding “a loyalty card or gift card”); chapter 124 was presented to the governor May 20, 2026 and signed May 27, 2026. Minn. Stat. § 645.02 (default effective dates for acts of the legislature). Wells v. Holiday Companies, Inc., 862 N.W.2d 492 (Minn. App. 2015) (No. A14-1421, decided April 20, 2015) — at 493–94 for the facts and the receipt language, at 495 for the summary judgment record and the district court’s element-by-element findings, and at 497 for the holdings quoted here: that had the legislature intended the definition to cover a record promising a specific good or service it “would not have been necessary . . . to include the phrase ‘to the value shown in the record,’” and that “the plain and ordinary meaning of ‘value’ is ‘cash value.’” Wells v. Holiday Cos., No. A12-1476, 2013 WL 777384 (Minn. App. Mar. 4, 2013), review denied (Minn. May 21, 2013), is the earlier unpublished appeal in the same case; it is cited here as described in the published opinion at 494 and was not independently retrieved. Ly v. Nystrom, 615 N.W.2d 302 (Minn. 2000) (No. C6-99-565, decided Aug. 3, 2000), at 314: “we hold that the Private AG Statute applies only to those claimants who demonstrate that their cause of action benefits the public.” 15 U.S.C. § 1693l–1 (subsec. (a)(2)(B), “gift certificate” defined as an “electronic promise”; subsec. (a)(2)(D)(v), exclusion for instruments “issued in paper form only”; subsec. (b)(1)–(3), the dormancy/inactivity/service fee prohibition and its 12-month, disclosure, and one-fee-per-month conditions; subsec. (c)(1)–(2), the expiration prohibition and the five-year and clear-and-conspicuous-disclosure exceptions). 15 U.S.C. § 1693q (EFTA relation to state laws, including the express reference to state laws on dormancy fees, inactivity charges, service fees, and expiration dates of gift certificates, store gift cards, and general-use prepaid cards, and the sentence that a state law is not inconsistent if the protection it affords is greater). 12 C.F.R. § 1005.20 (subsec. (a)(1)–(3), “card, code, or other device” definitions; (a)(7), definition of “activity”; (b)(1)–(6), the six exclusions including (b)(5) “[i]ssued in paper form only”; (c)(3)–(4), pre-purchase and on-the-card disclosure requirements; (d)(1)–(3), fee conditions; (e)(1)–(4), expiration conditions including the free-replacement rule; (f)(1)–(2), additional fee disclosures). Minnesota statutory text retrieved from the Minnesota Office of the Revisor of Statutes, revisor.mn.gov, on 2026-08-21; Laws 2026, ch. 124 retrieved from revisor.mn.gov the same day. Federal statutory text retrieved from the Office of the Law Revision Counsel, uscode.house.gov, on 2026-08-21; Regulation E text retrieved from the Electronic Code of Federal Regulations, ecfr.gov, on 2026-08-21. Case text retrieved from the Caselaw Access Project archive, static.case.law, on 2026-08-21. Currency note: § 325G.53 carries no 2026 session-law banner and its history line remains 2007 c 93 s 1; § 345.39 carries no 2026 banner; § 345.31 does, for the added subdivision 10 described above. This article states what these provisions say and what the cited decisions held. It does not resolve whether a purely electronic gift card is a “tangible record” under § 325G.53, subd. 1(a) — no Minnesota appellate decision has, and this article takes no position on the answer. This is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. Every case depends on its own facts. No outcome is promised or implied.