Arizona gift card law for restaurants: no fees, no expiring balances

Gift cards are easy money for a restaurant. Guests pay in advance, many never use the full balance and December sales can fund January's rent. But Arizona has a statute that limits what an issuer can do with the money once a card is sold, and it is stricter than the rules in many states. If you sell cards from the counter, through a website or at a fundraiser, you are an issuer under the law. Here is what A.R.S. section 44-7402 means in practice. Read the current statute on the Arizona Legislature's website and ask a lawyer if a situation is unclear.

What does the statute prohibit?

Two things. First, a gift card may not be subject to a fee. That rules out monthly dormancy fees, inactivity fees and charges for reloading or replacing a card. Second, the underlying monies on a gift card may not be subject to an expiration date. If a guest pays $50 for a card, the $50 remains theirs, however long it sits in a drawer. Older summaries of Arizona law described a regime in which fees could apply after a set time if disclosed. Those reflect earlier versions, so rely on the current text.

Can a card show an expiry date at all?

Yes, with a condition. According to the statute, the card or its code may carry an expiration date only if the card clearly discloses that the money on the card does not expire and that the consumer can request a replacement card from the issuer. In other words, the date may apply to the plastic or the code, not the value. For a small restaurant, the simplest approach is to print no date at all and avoid the disclosure question.

What does the law not cover?

The statute does not apply to cards distributed through an award, loyalty or promotional program when the consumer gave no money in exchange. A free dessert card handed out as a thank-you, or a bounce-back card included with a purchase, may fall into that group. Cards sold at a discount to a nonprofit or donated to a nonprofit for fundraising are also described as exempt. There are other exemptions for certain prepaid telecommunications and bank-issued cards. Because the definitions matter, ask a lawyer before you rely on an exemption, and keep records.

What is the penalty?

The statute provides a civil penalty of not more than five hundred dollars for each violation per card. A restaurant that sold two hundred cards with an illegal expiry term could face a large total. Enforcement is by the state, and consumers may also complain to the Attorney General's consumer protection office. The practical lesson is to design the program correctly from the start.

How should a restaurant set up its program?

• Print no expiration date on the card.
• Charge no fees of any kind, including for replacement.
• Write the terms in plain words on the card or the receipt: redeemable for food and drink, not for cash unless the law requires it.
• Keep a record of every card sold and its remaining balance.
• Honor old cards, including paper certificates from earlier years.
• Make sure your point-of-sale system tracks balances correctly.
• Train staff to explain the rules in a sentence.

What about promotions and bonus cards?

A bonus card is a good marketing tool, such as a free card with every large gift card purchase. Whether the bonus is covered by the statute depends on whether the consumer paid for it. Treat bonus cards as a separate type with their own clear terms, and keep them separate on your books. If you put an expiry on a bonus card, say clearly that it is a promotional card.

What about unclaimed property?

Separately from this statute, Arizona has unclaimed property laws that can require businesses to report and turn over some abandoned property. Whether and how they apply to gift card balances is a technical question. Ask your accountant, and keep clear records of outstanding balances.

What if you use a third-party gift card provider?

Some restaurants sell cards through a payment company or a platform. The provider's terms may set fees or expiry dates that do not meet Arizona law. Read the contract and ask the provider how its program complies. You are the seller guests will blame.

What do you tell a guest with an old card?

Welcome them, look up the balance and honor it. A guest who comes in with a card from three years ago is a loyal customer. If you cannot find the card in your records, take a photo of the card and note the problem for your accountant.

Are you hoping each gift card brings in a new guest?

A gift card works best when the person who receives it already knows what to order. Mosey is a food-first app where diners find places by dish, mood and neighborhood and rate what they actually ate. A restaurant can host a menu page, show its best-rated dishes and reply to guests, so a gift card holder can look up your best plate before they arrive. Nobody can pay to outrank you there, because Mosey Gold is earned from ratings alone.

More guides for your business:

• Arizona minimum wage, tip credit and sick time for restaurants in 2026
• What an MLB lockout would mean for Arizona restaurants
• What Arizona's 2026 minimum wage means for cafes

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