Don’t hoard those gift certificates in your top drawer too long, or you may get a surprise when you try to redeem them. Many states have enacted escheatment laws regarding how many years you have to use up your gift certificates and if you snooze, you lose.
The concept of “escheatment” rarely rears its ugly head these days, and is most often seen in law school classrooms and crossword puzzles. It has its roots in English Feudal law, where land that had no more inheritants (heirs) would “revert” back to the lord of the province or the crown on England. Over time, the term has been loosely associated with the concept of “reversion of personal and real property to the state.”
All states have escheatment laws, but many do not have them as they related to gift certificates. And while one wonders exactly what the state is going to do with your massage at Nordstrom’s Spa, some states have determined that they have the right to confiscate your coupon if you’re not going to use it.
As a general rule, most states that have gift certificate escheatment allow the gift certificate owner 5 years in which to use the gift certificate (though some are seven years). Currently, the following states have these laws on the books: Alaska, Arkansas, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Mississippi, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Vermont, Virginia, Washington, Montana, Connecticut, Delaware, D.C., Georgia, Hawaii, Nevada, New Mexico, New York, North Dakota, Ohio and Wisconsin.
Some states have laws on the books that allow for gift certificate escheatment in special cases, like if the certificate is redeemable in cash. Finally, there are some states that do not have any such laws on the books. Those enlightened states in which gift certificates are exempted from escheatment include Arizona, Arkansas, California, Maryland, and Florida.