Massachusetts gift card law for restaurants: the seven-year rule

Gift cards are a useful source of cash and new guests for a restaurant, but they are regulated. In Massachusetts, the main rule is that a gift certificate or card must stay redeemable for at least seven years. This guide, checked in October 2026, explains what the statute and the state's consumer guidance say and where to check the details. It is general information and not legal advice. Citations change, so confirm them with the Attorney General's office.

How long must a gift card be valid in Massachusetts?

Chapter 93, section 14S of the General Laws says a gift certificate sold or offered for sale in Massachusetts must be valid for not less than seven years after its date of issuance. A 2025 Boston.com explainer describes the same seven-year rule. Where federal and state rules differ, follow the one that protects the customer for longer, which for a card you sell in Massachusetts means the seven-year rule.

Do you have to print dates on the card?

Yes. The statute says the date of issuance and the expiration date must be clearly identified on the face of the certificate. For an electronic card with a stored dollar value, the dates may instead be printed on the sales receipt or made available in another way, such as a website or phone number. A certificate that does not carry its expiration date clearly can stay redeemable indefinitely, according to law firm summaries of the statute. In practice, print both dates on a paper card, and if you sell cards through an online system, make sure the receipt states them.

Can you charge fees on a gift card?

Federal and state rules limit fees on gift cards, and the rules for inactivity and service fees are detailed. Do not charge dormancy or service fees without checking the current law with a lawyer. A simple card with no fees, a clear value and a long expiry is easier to explain and avoids disputes.

What about cards issued by banks?

The Attorney General's guide says the Massachusetts rule does not apply in the same way to cards issued by a national bank, even when another business sells them. If you sell a bank-issued card, point customers to the issuer's terms. Your own restaurant card, issued by you, is covered by the Massachusetts rule.

What happens to unredeemed balances?

Whether you may write off a balance after the card expires depends on how the card was sold and whether unclaimed property law applies. Ask your accountant, and check the State Treasurer's unclaimed property guidance before you decide to write off balances. Do not treat a balance as revenue until you have that answer.

How does sales tax apply to gift cards?

Meals tax questions turn on when the customer buys the meal and when the card is redeemed. Ask the Massachusetts Department of Revenue, or your accountant, how to treat a card sale and a redemption, and make sure your point of sale system records a card sale as a liability and not as revenue.

What should you do if you close or sell your business?

Customers who hold your cards are creditors. Before you close, tell your lawyer and consider honoring or refunding outstanding cards, because customers and the Attorney General may complain if you do not. A buyer of your business should agree in writing whether it will honor existing cards.

How do you protect yourself from fraud?

Keep cards under control, record serial numbers, and limit who can issue them. Watch for large card purchases made with stolen credit cards, and for scam calls asking you to buy cards. Train staff to check the balance before accepting a card as payment.

Setting up gift cards in your point of sale

If you use a card program from your payment provider, check how it records the issue date and the expiration date, and whether the receipt prints both. Make sure the system sets the expiry no earlier than seven years after issue for Massachusetts sales, or sets no expiry at all. If you sell cards online, check that the confirmation email states the dates and the terms. Ask the provider whether it charges you for each card or each redemption, and what happens to balances if you change systems. Record the liability for outstanding cards on your books, because an accountant will want to know it at tax time and when you sell.

Using cards to bring guests in

Gift cards can lift sales in slow months and around the holidays. Many restaurants offer a small bonus card with a purchase, such as an extra card worth a modest amount for every larger card sold, but a bonus card may carry its own terms. Check the rules before you design a promotion, and state the terms clearly on the card. Post a sign at the register, mention the cards in your email list, and make buying easy online. Remember that a promotional card handed out free is treated differently from one that a customer paid for, so ask your lawyer how the seven-year rule applies to promotions.

More guides for your business:

• Massachusetts happy hour ban: what bars and restaurants can offer instead
• Massachusetts junk fee rules for restaurant service charges and surcharges
• Massachusetts wage, service rate and sick time for restaurants (2026)

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