Massachusetts requires gift certificates to remain valid for at least seven years and provides several layers of consumer protection. Once 90% of a certificate's value has been redeemed, the holder is entitled to cash for the remainder. Service fees are heavily restricted.
Federal context
Under the federal Credit CARD Act of 2009 and its implementing Regulation E (12 CFR 1005.20), gift certificates and most general-use and store gift cards sold in the United States must remain valid for at least five years from the date of issuance or last load. Federal law also restricts dormancy, inactivity, and service fees: a fee can generally be charged only if the card has been inactive for at least 12 months, the fee is disclosed, and no more than one fee is charged per month. State laws may add stronger consumer protections on top of this federal floor.
For a deeper federal explainer, see our CARD Act overview.
Expiration rules in Massachusetts
Massachusetts General Laws ch. 200A §5D and related statutes establish a seven-year minimum validity period for gift certificates. After seven years, the certificate may not expire if not used.
Operators should treat gift certificates as effectively perpetual obligations to avoid compliance risk.
Dormancy and service fees in Massachusetts
Massachusetts prohibits service and dormancy fees on gift certificates. Don't charge any post-sale fees.
Cash redemption for small balances
Massachusetts law requires that once a holder has redeemed 90% or more of a gift certificate's face value, any remaining balance below $5 must be paid in cash on request.
For example: a $50 gift certificate from which $46 has been redeemed leaves $4 remaining. The customer is entitled to that $4 in cash on request, because 92% has been redeemed and the remainder is below $5.
Disclosure requirements
Disclosures must comply with federal Regulation E and Massachusetts state law. Operators should state the seven-year minimum and the 90% cash redemption rule clearly.
Unclaimed property and escheatment
Massachusetts excludes gift certificates from unclaimed property reporting because they remain redeemable. This reduces escheat-related liability for Massachusetts operators.
Enforcement and penalties
The Massachusetts Attorney General's Office enforces consumer protection rules under M.G.L. ch. 93A, which provides for treble damages in some circumstances.
Recent updates
Massachusetts's framework has been substantively stable, though the AG's office periodically updates guidance.
Last reviewed: May 24, 2026. Statutes change. Verify the current text of the cited statute before acting on this summary.
Massachusetts compliance checklist
A short operational checklist for selling gift certificates in Massachusetts. Adapt with counsel before publishing your final policy.
- Configure all gift certificates to remain valid for at least seven years (most operators choose no expiration).
- Do not charge any post-sale dormancy or service fees.
- Train staff and POS to issue cash refund when 90% redeemed and balance < $5.
- Disclose terms clearly on the certificate.
- Maintain redemption records for at least seven years post-issuance.
Frequently asked questions about Massachusetts gift card law
What's the 90% cash refund rule?
If a customer has redeemed 90% or more of the original gift certificate value and the remaining balance is less than $5, the customer can request that balance in cash. Train your POS and staff to handle this.
What if I sell a $25 gift certificate? When does the 90% rule trigger?
If $22.50 (90% of $25) has been redeemed, leaving $2.50, the customer can request the $2.50 in cash.
Related legal basics
- Do Gift Certificates Expire? — A practical overview of federal and state rules on gift certificate expiration, written in plain English.
- Can You Charge Fees on Gift Certificates? — Federal and state rules on inactivity, dormancy, and service fees for gift cards.