Should Gift Checks Have an Expiration Date?

Republic Act No. 10962, otherwise known as the Gift Check Act of 2017, details what businesses can and cannot do when it comes to gift checks

Republic Act No. 10962, also known as the Gift Check Act of 2017, has the answer to this question.

Whether you know it as a gift card, gift certificate, or gift check, this prepaid stored-value card or paper has been a very handy alternative to cash when paying for purchases. In fact, according to MarketWatch, the market is expected to grow from $700 million (approximately PHP 41 billion) in 2023 to $1 billion (approximately PHP 58.6 billion) by 2028. 

It’s always a delight to receive one as a gift, as a perk from a membership or subscription, or as a freebie from a business. Every gift check states either a monetary value or free item or service that the holder is entitled to. There is one question gift check holders typically ask: Should gift checks have an expiration date? 

Gift Check Act of 2017

The answer to that question is no, and it is actually illegal for brands to put expiration dates on their gift checks. This is thanks to Republic Act No. 10962, otherwise known as the Gift Check Act of 2017, which was signed by former President Rodrigo Duterte. 

According to Section 5 of the Gift Check Act, the following are considered unlawful:

  • Issuing of a gift check that bears an expiration date
  • Imposing of an expiration date on the stored value, credit, or balance of a gift check
  • Not honoring unused value, credit, or balance stored in the gift check

When Can Businesses Refuse to Honor a Gift Check?

The Gift Check Act of 2017 does have provisions that protect businesses from customers who may abuse their gift checks. The law states that there are certain instances wherein brands can legally refuse to honor a gift check. 

According Section 7, businesses may refuse to honor any gift check that has already been lost for as long as the loss is not the business’s fault. Second, businesses may also refuse to honor any gift check that has been mutilated or defaced to the point that the gift check’s authenticity and security features can no longer be identified. 

It should be noted that the law does not prevent any issuer of a gift check from prescribing reasonable rules for changing, upgrading, and updating a gift check. However, there are conditions that must be met. 

First, such rules should be approved by the Department of Trade and Industry (DTI). Such rules should also not impose any additional costs on the consumer. Lastly, the rules should not violate the provisions of the Gift Check Act of 2017. 

What Happens to Gift Checks If a Business is About to Close? 

The Department of Trade and Industry (DTI) issued Department Administrative Order (DAO) No. 19-03 in 2019, which contains the implementing rules and regulations (IRR) for the Gift Check Act of 2017. 

The IRR states that, should a business decide to close down, it has to ensure that the public is sufficiently informed of its plans. The business is also required to inform the DTI of its closure in writing. All of these should be done at least two months before the date of closure. 

As for the gift checks, the business must encourage all holders to either surrender the checks for refund or use them before closing. Note that the choice should be made by the holder of the gift check, and not the business.