Store credit expiration laws by state: can store credit expire?
Gift card laws are well known. Store credit is less clear, because some states treat credit for a return as a gift certificate and others leave it out. Here is what the statutes say, state by state, with a link to each one.
In this guide
Store credit expiration law by state is messier than gift card law. A few states write store credit or "merchandise credit" straight into their gift certificate statutes, so the same expiry ban or minimum period applies. Others say nothing about it, and some go the other way and exclude credit given for returns.
This guide covers the federal rule and what it leaves out, a state-by-state table for store credit, what happens to credit nobody spends, and how to set expiry on Shopify store credit. For gift cards that customers buy, our guide to gift card expiration laws by state has the full rules.
Store credit vs gift card: why the law treats them differently
A gift card is bought. Someone pays money and gets a card with a value. Store credit is usually given. You issue it instead of a cash refund, as an apology, or as part of an exchange. Most gift card laws are written around the sale, so they use words like "sold", "purchased" or "made for consideration".
That wording is the whole question. When a customer returns a $60 jacket and gets $60 in credit, did they pay for that credit? Some legislatures answered yes and named it in the statute. Others never addressed it. A few made a point of excluding it.
Federal law: Regulation E leaves store credit out
The federal gift card rules are in Regulation E, 12 CFR 1005.20. They set a five-year minimum on the funds of a gift certificate or store gift card, limit dormancy fees to cards with a year of no activity, and require the expiry to be shown on the card. They come from the Credit CARD Act of 2009, and the Federal Reserve's rules took effect on 22 August 2010.
The regulation excludes several kinds of card, including loyalty, award and promotional cards, cards "not marketed to the general public" and cards "issued in paper form only". The official interpretation then gives store credit as a direct example of the "not marketed" exclusion (comment 20(b)(4)-2.v):
"A merchant provides store credit to a consumer following a merchandise return by issuing a prepaid card that clearly indicates that the card contains funds for store credit."
Because the card is issued to give store credit and refunds by prepaid card aren't advertised to the public, the exclusion applies. Comment 20(b)(4)-1 adds that a sign at the till saying store credit is issued by prepaid card is not "marketing" the card. So the federal five-year floor does not cover store credit for returns, as long as you don't advertise refunds by card to the public. State law is where the rules are.
Store credit expiration laws by state
The table lists the states where we found a rule that touches store credit, plus the largest states where the statute is silent. "Not mentioned" means the gift certificate law doesn't name store credit, merchandise credit or return credits either way.
| State | Store credit in the law? | Expiry | Fees and cash-out | Source |
|---|---|---|---|---|
| Florida | Yes, a "credit memo" issued for returned merchandise | Banned | All post-sale fees banned, including dormancy | Fla. Stat. 501.95 |
| Massachusetts | Yes, credit slips for returned goods | At least 7 years | Not specified for credit slips; check the statute | c. 93, s. 14S |
| Maryland | Yes, "a store credit for returned goods" | No expiry or fee within 4 years | Later terms printed in 10-point type | Com. Law 14-1319 |
| Illinois | Yes, a credit slip for returned goods | At least 5 years | No post-purchase fees | 815 ILCS 505/2SS |
| New Mexico | Yes, "a merchandise credit" | At least 60 months | No fees of any kind | NMSA 57-12-26 (unofficial copy) |
| Louisiana | Yes, "a merchandise credit" | At least 5 years | No service fees; one handling fee up to $1 | R.S. 51:1423 |
| New York | Named separately: must be honored, terms can't change after issue | 9 years for gift certificates; check the statute for credits | No fees on gift certificates | GBL 396-i |
| New Jersey | Return credits excluded from the $5 cash-out | No expiry on stored value cards sold since Dec 2012; the law doesn't say whether a return credit counts as sold | Dormancy and inactivity fees banned on credit memos and stored value cards (46:30B-43.1). The fee rules in 56:8-110 cover only exempt cards, such as promotional ones | N.J.S.A. 46:30B-42.1, 43.1 |
| Texas | Return credits without receipt excluded from cash-out | Expiry allowed if disclosed | Fee only after the first year, if reasonable and disclosed; cash for balances under $2.50 | Bus. & Com. Code ch. 604 |
| California | Not mentioned | Banned on gift certificates sold | Fees banned (one narrow dormancy exception); cash for balances under $15 | Civ. Code 1749.45, 1749.5 |
| Washington | Not mentioned in the gift certificate law | Banned on gift certificates | Fees banned; cash under $5 | RCW 19.240 |
| Connecticut | Not mentioned | Banned on gift certificates | Dormancy fees banned; cash under $5 | CGS 42-460, 42-461, 3-56a, 3-65c |
| Minnesota | Not mentioned | Banned on gift certificates | Fees banned | Minn. Stat. 325G.53 |
| Michigan | Not mentioned | At least 5 years | No inactivity or service fees | MCL 445.903g, 445.903f |
| Ohio | Not mentioned | At least 2 years | No fees in the first 2 years | R.C. 1349.61 |
| Vermont | Not mentioned | At least 5 years | Dormancy fees banned; cash under $1 | 8 V.S.A. ch. 81 |
| Maine | Account credits excluded from "gift obligation" | No time limit on gift obligations | No fees except issuance; cash under $5 in person | 33 M.R.S. 2052, 2067 |
| Wisconsin | No state gift card law | Federal rules only | Federal rules only | DATCP fact sheet |
A few notes on reading it:
- Florida, Massachusetts, Maryland, Illinois, New Mexico and Louisiana are the clearest cases. Credit for a return is inside the law, so the state's expiry rule applies to it as written.
- New York doesn't put store credit inside the definition of gift certificate, but subdivisions 1-a and 2 of GBL 396-i name "store credits" next to gift certificates. If your credit terms limit how long it can be used, that limit has to be in the terms from the start. You can't shorten it later.
- California is the big unknown. The expiry ban applies to a gift certificate sold "to a purchaser", and the statute doesn't say whether a return credit counts. Our California cash-out law news piece covers the $15 rule for gift cards.
- Wisconsin has no gift card statute at all. The state consumer protection agency says "Wisconsin does not specifically regulate the sale of gift cards" and points to the federal rules.
States we could not verify
We found gift card laws in Rhode Island, Oregon, Hawaii, Nevada, Colorado, New Hampshire and Arkansas, but the official legislature sites would not load for us, so we could not confirm the current text. Their store credit treatment is "check the statute". In Pennsylvania, Georgia, Arizona, Utah and Iowa we found unclaimed property rules (below) but no consumer expiry statute we could confirm. For the other states, check the statute before you date store credit for customers there.
Does unused store credit go to the state?
Even where store credit can expire, the money doesn't always become yours. Unclaimed property laws (escheat) can require a business to report old balances to the state, which then holds them for the customer. Here the split between gift cards and store credit is often written out plainly.
| State | Store credit or credit memos | Source |
|---|---|---|
| Wisconsin | Excluded: "An in-store credit for returned merchandise" | Wis. Stat. 177.01 |
| Utah | Excluded: "an in-store credit for returned merchandise" | Utah Code 67-4a-102 |
| Washington | Excluded: "Store credit for returned merchandise" | RCW 63.30.010 |
| Ohio | Excluded: merchandise credit redeemable only for goods or services | R.C. 169.01 |
| Florida | Excluded: credit memos as defined in 501.95 | Fla. Stat. 717.1045 |
| Virginia | Excluded: credits redeemable in merchandise or services | Va. Code 55.1-2515 |
| North Carolina | Excluded if the credit has no expiry date or says it doesn't expire; otherwise retail credits after 3 years | G.S. 116B-54, 116B-53 |
| Michigan | Credit memos presumed abandoned after 3 years | MCL 567.235 |
| Minnesota | Credit memos reportable after 3 years | Minn. Stat. 345.39 |
| New Jersey | Credit memorandum presumed abandoned after 3 years | N.J.S.A. 46:30B-42 |
| Georgia | Credit checks or memos reportable after 5 years | Georgia DOR filing guide |
| Delaware | Credit memoranda listed as property | 12 Del. C. 1130 |
Two things follow from this. First, in the reporting states, letting credit expire can mean you owe the balance to the state rather than keeping it. Second, which state can claim a balance usually depends on the customer's last known address in your records, which for an online store can be any of the 50.
Arizona is a special case for gift cards this year. A 2026 bill struck the gift card exclusions from its unclaimed property definitions, and the Arizona Department of Revenue has published a notice and a ruling on it. Our gift card expiration laws guide covers the details.
Store credit expiry on Shopify
Shopify gives you full control over expiry on store credit, which also means the law is on you. According to Shopify's help centre:
- Expiry is set per issuance. There is no store-wide default.
- Credit expires at the end of the day in your store's timezone.
- When a customer has several credits, the one that expires first is spent first.
You set the date when you add credit from the customer page or when you refund an order to store credit. Our step-by-step guide on how to give store credit on Shopify shows both screens, and the Shopify POS store credit guide covers the shop counter.
Since Shopify has no per-state setting, the practical choices are:
- No expiry on refund credit. This is safe in every state above. Florida, the strictest on credit memos, bans expiry outright.
- A long period, seven years or more. That clears Massachusetts, Illinois, Maryland, New Mexico and Louisiana. It still doesn't fit Florida.
- Short expiry only on credit you give away. Goodwill and promotional credit, where the customer paid nothing, is the kind most laws exempt. Keep it clearly labelled so you can show it wasn't a refund.
GiftmintGift cards with emails that carry your logo, delivery on the day the buyer picks and a balance check in your store.See how it works
A store credit policy checklist
- Decide which credits are refunds and which are free goodwill, and record the reason on each one.
- Leave refund credit without expiry, or use at least seven years if you sell to Massachusetts.
- Never shorten an expiry after the credit is issued. New York says so explicitly.
- State the expiry in the email the customer gets and on your returns page.
- Ask your accountant whether old credit balances need to be reported, especially in Michigan, Minnesota, New Jersey, Georgia and Delaware.
- Recheck once a year, since unclaimed property laws change often.
The part people forget is the record. If a state ever asks why a credit expired, you need to show what it was for and what the customer was told. We build Shopify apps, and Giftmint is ours for gift cards and store credit. It sends native Shopify store credit by email, with an expiry date and the reason on record, and on the Business plan you can issue it in bulk from a spreadsheet. It isn't on the Shopify App Store yet; you can join the launch list.
In short, store credit for returns is covered in some states and silent in others, and the federal five-year rule doesn't reach it. If you want one setting that works everywhere, don't put an expiry on refund credit, and keep expiry dates for credit you gave away for free.
Frequently asked questions
Can store credit expire?
In many states, yes, but not everywhere. Florida bans expiry on credit memos issued for returned merchandise, Massachusetts requires at least seven years for return credit slips, Maryland at least four years and Illinois at least five. Where a state's law doesn't mention store credit, the safe reading is to treat it like a gift card.
Is it legal for store credit to expire in California?
California's gift certificate law bans expiry dates on gift certificates sold to a purchaser, and its definition does not mention store credit or credit for returns. The statute doesn't settle whether a credit issued for a return counts as a sale, so many stores simply don't date it. Ask a California lawyer if you want to.
Does merchandise credit expire in Massachusetts?
It can, but not quickly. Massachusetts law says credit slips for returned goods must be valid for at least seven years, the same minimum as gift certificates. A gift certificate with no expiry date marked is redeemable forever.
Is it illegal for gift cards to expire?
Under federal law, the funds on a store gift card can't expire sooner than five years after issue or the last load. Several states go further and ban expiry on most gift cards, including California, Connecticut, Florida, Minnesota, Montana and Washington. Promotional cards given away for free are usually exempt.
When did gift cards stop expiring?
They didn't stop everywhere. The federal five-year minimum came from the Credit CARD Act of 2009, and the Federal Reserve's rules took effect on 22 August 2010. Some states banned expiry earlier or later, on their own timelines, so the date depends on the state.
Does unused store credit go to the state?
Sometimes. Wisconsin, Utah and Washington exclude in-store credit for returned merchandise from unclaimed property, and Ohio, Florida and Virginia exclude merchandise credits. Michigan, Minnesota, New Jersey, Georgia and Delaware list credit memos as reportable property after three to five years.