Note that while this post uses the terms gift certificates and gift cards interchangeably, states generally define these terms either in their unclaimed property or general business law.
New York State Comptroller Thomas P. DiNapoli recently encouraged gift certificate owners in the state to spend their holiday gift certificates before they become lost, subject to inactivity fees or dormant. Under New York’s unclaimed property law, gift certificates have a 5-year dormancy period, after which they must be reported as unclaimed property. Under state unclaimed property laws, businesses must report unclaimed funds to the states in accordance with the priority rules set forth by the U.S. Supreme Court in Texas v. New Jersey.  Under the first priority rule, property is reported to, or escheats, to the state of the owner’s last known address, according to the books and records of the company (a.k.a., holder). If the last known address is unknown, the property escheats to the holder’s state of incorporation (corporate domicile).