If a customer buys a $50 gift card at your café and shows up 18 months later to spend it, can you tell them it’s expired? For almost every independent café in Canada and the US, the answer is no — and trying to expire it or skim a fee off the balance can put you offside consumer-protection law. Gift cards are one of the most heavily regulated things a small food business sells, precisely because they were abused for years.
This guide lays out the actual rules by jurisdiction, in plain language, so you can set an honest gift card policy and stop worrying about it. It is written for an owner-operator running a café or restaurant, usually on Square, in Canada or the US. None of this is legal advice — confirm your own province or state before you print terms — but it will get you 90% of the way there.
The short version
Gift cards sold for money almost never expire anymore. Two waves of legislation — provincial reforms across Canada between 2007 and 2009, and the US CARD Act of 2009 — made open-ended expiry dates and quiet inactivity fees mostly illegal on the kind of single-merchant card a café sells. The details differ by jurisdiction, but the direction is the same: the money belongs to the customer, and it stays theirs.
That is also why selling eGift cards on Square is low-risk from a compliance standpoint — the platform is built around no-expiry balances by default.
Canada: it’s provincial, and the rule is “no expiry”
Gift cards in Canada are regulated at the provincial and territorial level, not federally, so the exact wording varies. But the substance is remarkably consistent: a general-use, single-merchant gift card purchased for money cannot have an expiry date, and fees are heavily restricted.
This is true across Ontario, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland and Labrador, and Quebec. The federal Financial Consumer Agency of Canada summarizes the same principle for the cards it can speak to.
Fees are also restricted. In provinces like Ontario and British Columbia, dormancy and inactivity fees on single-merchant cards are prohibited. There are narrow carve-outs — a fee to replace a lost card, for example — but you cannot quietly erode a balance month by month.
The exceptions that exist (and why they rarely apply to a café)
The no-expiry rule has a few well-defined exceptions, none of which usually help a café that just wants to sell gift cards:
- Promotional cards. If you gave a card away for free — a “$10 on us” card in a swag bag — and received no money for it, expiry is generally allowed because the customer didn’t pay for the value.
- Specific-service cards. A card for one named service or product (a “one free haircut” card, or a prix-fixe dinner for two) can sometimes carry an expiry, though Quebec still requires you to honour the cash value if you stop offering the service.
- Multi-store / mall cards. Reloadable, multi-merchant, or shopping-mall cards are treated differently. In Ontario, for instance, mall gift cards must keep their value for at least 15 months, after which a dormancy fee of up to $2.50 per month may apply.
A plain “$50 to spend at our café” card is none of these. It’s a single-merchant card sold for money, so the no-expiry rule applies.
Quebec is the strictest
Quebec’s Consumer Protection Act is the toughest in the country: no expiry date is permitted on any gift card purchased in Quebec, full stop. Quebec also uniquely requires that if a card was sold for a specific service you no longer offer, you must still honour its cash-equivalent value. If you operate in Quebec, “gift cards never expire” is the only compliant policy.
United States: the CARD Act sets a five-year floor
In the US, the baseline is the Credit CARD Act of 2009, which added federal gift-card rules through Section 915 of the Electronic Fund Transfer Act, with Federal Reserve rules taking effect in 2010. Three things matter for a café:
- Funds must last at least five years. The money underlying a gift card or gift certificate has to stay redeemable for a minimum of five years from the date it was issued or the date value was last loaded.
- Inactivity fees are tightly limited. Dormancy, inactivity, or service fees are prohibited unless the card has gone unused for at least 12 months, no more than one such fee is charged per month, and the fees were clearly and conspicuously disclosed before purchase.
- Disclosure is mandatory. Any expiry term and any fee must be printed clearly on the card or its packaging before the customer buys it.
States often go further. Many states ban expiry dates entirely or restrict fees more aggressively than federal law. California, for example, generally prohibits expiry dates on gift certificates and bans service fees (with a narrow cash-back rule for small balances). The federal five-year rule is a floor, not a ceiling — your state may leave you no room for expiry at all.
Canada vs. US at a glance
| Canada (most provinces) | United States (federal CARD Act) | |
|---|---|---|
| Expiry on a paid single-merchant card | Not allowed | Funds must last ≥ 5 years; many states ban expiry outright |
| Inactivity / dormancy fees | Prohibited (narrow exceptions) | Only after 12 months unused, max 1/month, disclosed |
| Who regulates it | Provinces and territories | Federal floor + individual states |
| Strictest jurisdiction | Quebec — no expiry, ever | States like California — no expiry, no fees |
| Promotional (free) cards | May expire | May expire (state rules vary) |
Rules current as of 2026. Always confirm the current statute for your specific province or state before printing terms.
What Square actually enforces
Here’s the practical part for the ~half of independent cafés on Square. Square gift cards and eGift cards do not expire by default, and Square does not provide a setting to put an expiry date on the balance. Square is explicit that this is deliberate: because expiry rules differ so much across the many provinces and states its sellers operate in, it doesn’t build a feature that would let a merchant accidentally break the law.
You can type a note into the Additional Policy field that a customer sees at purchase, but Square does not technically enforce anything you write there — the balance stays spendable regardless. In other words, the safe default is also the only default: your Square gift cards never expire, and you don’t have to do anything to make that true.
So how should a café think about gift cards?
If you can’t expire the balance and can’t skim a fee, the outstanding gift card money sits on your books as a liability — a promise to deliver coffee later. That is not a problem to engineer around; it’s an opportunity to manage well.
- Treat unredeemed balances as a marketing asset, not dead weight. A customer with $30 left on a card is a customer with a reason to come back. That’s demand you already sold.
- Nudge redemption instead of expiring it. A friendly push notification or email — “you still have a balance waiting” — recovers value the legal way and brings someone through the door. This is exactly the kind of moment push notifications drive better than any other channel.
- Account for breakage honestly. Some cards are never fully spent. Your accountant can help you recognize breakage revenue appropriately under your local rules, but never treat “they forgot” as a fee you’re entitled to charge.
- Use gift cards to seed loyalty. A gift card recipient is often a brand-new customer someone else paid to introduce to you. Capturing that person into a loyalty program turns a one-time gift into a regular. We compare the two tools directly in gift cards vs. loyalty for repeat visits.
Where a branded app fits
If gift cards are part of how you bring people back, it helps to have them in the same place customers already order — not on a separate site they have to remember. A branded ordering app can carry a customer’s gift card balance, loyalty points, and order history together, and let you message them when a balance is sitting unused.
That’s part of what Tany builds for Square cafés: a branded iOS and Android app plus web ordering with eGift cards, self-running loyalty, and push notifications, live in about a day on your existing Square POS for $99 CAD/month per location. The compliance point stands on its own, though: for the cards you sell for money, “never expires” isn’t just good service — in most of Canada and the US, it’s the law.
Sources
- Gift cards — Financial Consumer Agency of Canada
- Buying or using gift cards — Government of Ontario
- Gift cards — Consumer Protection BC
- Credit CARD Act requirements for gift certificates and gift cards — Federal Reserve / Consumer Compliance Outlook
- Federal Reserve announces final rules on gift card fees and expiration
- Gift Cards and Gift Certificates: Statutes and Legislation — NCSL
- Send an eGift card — Square Support