Georgia gift cards: expiry limits and unclaimed property reporting

Gift cards are a cheap source of cash and a reliable way to bring guests back, but in Georgia an unredeemed card is not free money forever. The state limits expiry dates, and cards that stay unused for long enough must be reported and turned over to the state as unclaimed property, a process called escheat. A restaurant that ignores it risks audits, penalties and interest. This guide explains the rules at a general level, so confirm each point with the Georgia Department of Revenue or an attorney.

Can a Georgia gift card expire?

Federal law sets the floor. Under the Consumer Financial Protection Bureau's rule, section 1005.20 of Regulation E, the funds on most store gift cards cannot expire for at least five years from the date of issue or the date money was last loaded, the expiration date must be disclosed on the card, and an inactivity fee may be charged only after a year with no activity. The Georgia Restaurant Association has also published guidance on how Georgia law treats expiry dates and fees printed on a card, so read that and ask an attorney whether Georgia adds anything to the federal rule. In practice, many restaurants sell cards with no expiry date at all, which is simpler and avoids any dispute. Where state and federal rules differ, follow the stricter one.

What is escheat?

Escheat is the legal transfer of abandoned property to the state. For a gift card, if the balance has not been used for the dormancy period, it may be treated as unclaimed property. The Department of Revenue publishes a table of dormancy periods by property type, and the period for gift certificates is set there and in the Georgia unclaimed property law, so look up the current entry for gift cards rather than relying on a figure from a trade article. After you report and pay, the cardholder can claim the money from the state, not from you.

When is the report due?

The Georgia Department of Revenue's 2026 holder filing instructions say reports are due on November 1 for all holders except insurance companies. The filing is annual and covers a defined reporting period, which the department states each year. Mark November 1 on your calendar, and begin gathering data in September. Name one person to own the task and a backup, and put it in your yearly checklist alongside tax filings and license renewals. Because the date can change, check the department's holder instructions each year.

Do you have to write to the cardholder first?

The department's instructions describe contacting owners before you file, a step called due diligence. Check the current instructions for the dollar threshold and the timing. A gift card is not always tied to a named person, so you may have no address. If you do have contact details, for example for cards sold online with an email address, send the notice. If you do not, keep a record showing that you had no information. Ask the department whether small balances are exempt from reporting, and do not assume they are.

What records do you need?

1. The date each card was sold or issued and its original value.
2. The balance and the date of last activity.
3. Any contact details you hold for the purchaser or the recipient.
4. Any expiry date or fees printed on the card.
5. Copies of due diligence letters and proof of mailing.
6. Copies of each unclaimed property report and payment.

If you use a third-party gift card provider, ask whether it handles reporting or whether you remain the holder responsible.

What about the tax treatment?

A trade article has suggested the restaurant may be able to take a tax deduction in the year of escheat, but that is not verified tax advice. Ask your accountant how the sale, the redemption and the escheat should be recorded. The money from selling the card is not usually revenue until the card is used, so your books should treat it as a liability.

What happens if you do not report?

The state can audit holders, and penalties and interest can apply for late or missing reports. Some states use third-party auditors who examine records for many years back. An audit can reach back past your last report, so it is better to start now than to wait. If you have never filed, ask the department about voluntary disclosure. Many states offer reduced penalties to holders who come forward before they are contacted, though terms vary, and an accountant or attorney can help you prepare the first filing.

How can you reduce the burden?

Encourage guests to spend cards. Offer reminders with a bonus for using a card in a quiet month, Run a promotion that rewards guests who use a card in a quiet month, and sell physical cards in a way that records the buyer's name. Limit the number of cards sold at deep discounts, because heavily discounted cards that are never redeemed can be a headache. Keep a simple spreadsheet or use software that tracks balances and dormancy. Review the report quarterly so that you are not working out your obligations in October. If you change your gift card provider, ask for a full export of balances and dates first, and keep it. When you sell the business, expect the buyer to ask about outstanding gift card liabilities and your unclaimed property filings, so a clean record also helps the sale.

More guides for your business:

• Georgia alcohol licenses and Sunday brunch hours for restaurants
• Georgia sales tax on restaurant meals and Atlanta's combined rate
• Atlanta and Savannah alcohol rules for restaurants: what to ask the city

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