States have once again introduced and enacted a number of bills that have an impact on state gift card compliance, primarily in the consumer protection space. States have continued to actively adopt and change rules for displaying and packaging gift cards and for training employees on gift card sales, with several requiring a model notice to be displayed for online or in-person purchases.
Unclaimed Property Developments
As discussed in our prior advisory, most state unclaimed property laws include provisions that apply to gift cards, gift certificates, and other similar instruments that are redeemable only for goods and services, not cash. However, 37 states expressly exempt these instruments from escheatment or do not have a law requiring escheatment, including significant jurisdictions such as California, Illinois, Florida, Ohio, Pennsylvania, and Texas. Many states premise their exemption on the gift card or gift certificate not containing an expiration date or service or inactivity fees. On the other hand, the remaining 14 jurisdictions (including the District of Columbia) have laws purporting to require the escheatment of a gift card or gift certificate.
While there was no legislation that impacted the escheatment of gift cards in 2025, we expect states to revisit this subject in the near future. The relative calm in the regulatory landscape provides an opportunity for holders to undertake longer-term planning efforts to ensure compliance with gift card escheat requirements.
Fraud Prevention Developments
Gift card scam prevention acts and guidelines continue to proliferate across the country as states attempt to address increasingly sophisticated attempts at gift card fraud. According to the Federal Trade Commission, gift card fraud made up $212 million of more than $12.5 billion of total loss due to fraud in 2024, similar to the amounts in 2023. It also shows no signs of slowing down; the total gift card fraud during the first half of 2025 was $118 million.
This year, Nebraska and New Jersey joined Delaware, Maryland, New York, and Rhode Island as states that have passed gift card legislation imposing specific requirements on merchants that sell gift cards (and proposed legislation is pending in Pennsylvania). Maryland’s and New Jersey’s requirements go into effect on October 1, 2025, whereas Nebraska’s new statute took effect on September 3, 2025. Note that Delaware’s and Nebraska’s requirements do not apply to merchants that only sell gift cards that are redeemable with the particular merchant and not at third-party locations.
Notice requirements
One important emerging dynamic is distinctions in requirements for displays of “conspicuous” notice at or near where gift cards are displayed or where the sale occurs, cautioning purchasers about prepaid card scams and instructing purchasers on what to do if they suspect they might be a potential victim of such a scam.
Maryland and New Jersey require both in-store and online notices, while Delaware, Nebraska, New York, and Rhode Island only require in-store notices. The statutes are generally silent on what is meant for notice to be “conspicuous,” leaving this point open to a merchant’s interpretation without further guidance from the state.
It is also important to note that New Jersey and Rhode Island require merchants to use the exact model notices as published by the states, while Maryland, Nebraska, and New York allow the notice to be in “substantially similar” forms as the state’s published model notice. However, these states have not provided any further guidelines on when a notice is substantially similar to the model notice (and it does not appear that Nebraska has published a notice yet). Delaware is not required to publish a model notice and has not in fact published one, at least as far as we are aware.
Packaging requirements
Maryland and New Jersey impose specific packaging requirements on retailers that sell gift cards, including requiring warnings to not sell or purchase the gift card if the gift card or packaging appears to be broken or indicates tampering, requiring important gift card numbers (e.g., related to redemption) to be concealed, and sealing the gift card in a package that is not easily opened, removed, or replaced without signs of tampering. Note that New Jersey’s requirements specify both how a gift card without packaging should be protected and how a gift card with packaging should be protected.
Employee training requirements
Several states also include fraud-related employee training requirements for retailers, some as part of new legislation. Maryland and New Jersey now require merchants that sell gift cards to train their employees in accordance with the guidelines established by the legislation. However, little guidance has been provided on what actually constitutes proper training or how these provisions would actually be enforced, though both states have provided some guidance on their websites.
Other states
Pennsylvania HB 1067 is currently pending and imposes notice and employee training requirements. However, HB 1067 would not apply to a business that is classified under arts, entertainment, or recreation (NAICS Sector 71) or accommodation and food services (NAICS Sector 72), provided that the gift cards sold by that business are valid only for a merchant or group of merchants affiliated with that business.
We expect state legislatures to sustain their focus on gift-card-related fraud prevention measures in their upcoming legislative sessions, particularly as gift card fraud and gift card retail crime continue to grow.
Other Consumer Protection Developments
States have mostly been focused on fraud-related legislation in 2025, and there have been no changes to state laws on consumer protection so far, including gift card cash-back requirements and restrictions on expiration dates and inactivity/service fees.
As predicted last year, after California SB 1272—which would have increased the cash-back threshold from less than $10 to $25 or less (subject to further increases due to inflation)—was not passed, the California legislature decided to revisit the cash-back threshold in 2025. The measure came back in 2025 as California SB 22, a bill that would adjust the cash-back threshold to $15 (rather than the $25 threshold proposed in SB 1272) and remove a previously considered inflation adjustment factor. SB 22 has passed both chambers of the legislature and appears headed toward enactment.
Going Forward
Retailers and other companies that offer gift cards to consumers should continue to carefully monitor state legislative developments to determine whether any action is required given the nature of the company’s business. We advise contacting legal counsel to determine how best to implement state gift card notice, packaging, and employee training requirements as specifically applied to the company’s business because the statutory language and guidance provided by the states can be ambiguous when attempted to implement in practice, and the landscape is evolving. We expect that states will remain focused on the regulation of gift cards and similar instruments from the unclaimed property, fraud, and consumer protection lenses as the prepaid industry continues to grow.
If you have any questions, or would like additional information, please contact one of the attorneys on our Unclaimed Property team or one of the attorneys on our State & Local Tax team.
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