A Closer Look at the Probe
New York is taking a hard look at how Amazon handles forgotten money. Attorney General Letitia James has launched an investigation into the e-commerce giant’s gift card practices. The state wants to know if Amazon is keeping unused balances that actually belong to shoppers or the public treasury. It is a quiet dispute over millions of dollars, buried deep in digital accounts.
At the heart of the probe are Amazon’s fees and redemption rules. Under New York state law, gift cards must remain valid for years, and companies face strict limits on what they can charge for inactivity. More importantly, when gift cards sit unused for too long, those funds are supposed to go to the state’s Abandoned Property Fund. The state then holds the money until the rightful owner claims it. Investigators suspect Amazon might not be playing by these rules.
The Battle Over Unclaimed Millions
James’s office is exploring whether the Seattle-based retailer applied illegal service fees to slowly drain unused balances. The probe also looks at whether Amazon failed to hand over millions of dollars in dormant funds to the state’s tax department. Under New York’s Abandoned Property Law, gift card balances that remain inactive for five years are deemed abandoned. At that point, companies must turn them over to the state. This process, known as escheatment, keeps corporations from turning forgotten consumer cash into pure corporate profit.
“Gift cards shouldn’t have hidden expiration dates or sneak fees that eat away at their value,” James said, emphasizing her office’s commitment to consumer financial protections. “New York law is clear: businesses cannot just pocket unclaimed money that belongs to consumers.”
For Amazon, the financial stakes are massive. The company sells billions of dollars in gift cards annually. Even a tiny fraction of unredeemed balances can add up to a huge windfall. If the investigation reveals systemic violations, Amazon could face hefty penalties. They might also be forced to pay restitution to thousands of New York residents who lost their balances over the years.
Stricter Laws for Retailers
This is not the first time gift card practices have landed major retailers in hot water. New York has previously settled with other major corporations over similar issues. The state’s laws on this matter recently got even tougher. For cards purchased on or after December 10, 2022, the expiration period was extended to nine years. Furthermore, inactivity fees on these newer cards are banned completely. These changes aim to give consumers more time to spend their money without worrying about dwindling balances.
Amazon has defended its policies, claiming it complies with all local and federal regulations. However, the Attorney General’s subpoena seeks detailed records on gift card transactions, terms of service, and inactive account balances dating back several years. The company will have to account for where every unused dollar went, a task that could expose how much money is left abandoned on its platform each year.
Why Unused Balances Matter
Shoppers often forget about small balances left on digital or physical cards. Often, it is just a few dollars. But on a global platform like Amazon, those tiny amounts pool into a massive fortune. Critics argue that tech platforms make it too difficult to redeem small balances, sometimes hiding terms in lengthy user agreements that consumers rarely read. This investigation is part of a larger, nationwide push by regulators to crack down on “junk fees” and other corporate practices that quietly drain consumer wallets.
The Attorney General’s office encourages New Yorkers to check their gift card balances regularly. Anyone who believes they were charged illegal fees or blocked from using their balance is urged to file a complaint. As the investigation moves forward, other states may look to New York’s actions to see if they should launch their own inquiries into how major tech platforms handle consumer credit. For now, Amazon must prepare to defend its practices under the state’s microscope.
