Gift cards make great stocking stuffers — as long as you don’t stuff them in a drawer and forget about them after the holidays.
Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, making up a third of those sales.
Most of those gift cards will be redeemable. Paytronix, which tracks restaurant gift card sales, says about 70% of gift cards are used within six months.
But many cards — worth tens of billions of dollars — are forgotten or not used. That’s when the life of a gift card gets more complicated, with expiration dates or inactivity fees that can vary by state.
Here’s what to know about the gift cards you give — or get:
LOVE, BUT GONE
After clothing, gift cards will be the most popular gift this holiday season. Nearly half of Americans plan to give it away, according to the National Retail Federation.
But much will remain unspent.
The gift card is lost or forgotten, or the recipient relies on it for a special occasion. In a July survey, consumer finance company Bankrate found that 47% of US adults have at least one unused gift card or voucher with an average value of $187. That’s a total of $23 billion.
Billions in gift cards will never be spent. AP
GIFT OF TIME
Under federal law that took effect in 2010, gift cards cannot expire for five years from the time they were purchased or from the last time someone added money to them. Some state laws require a longer period. In New York, for example, any gift card purchased after Dec. 10. 2022, cannot expire for nine years.
Different state laws are one reason many stores have stopped using expiration dates altogether, said Ted Rossman, senior industry analyst at Bankrate.
Americans are expected to spend nearly $30 billion on gift cards this holiday season. AP
USE IT OR LOSE IT
While gift cards may take years to expire, experts say it’s still smart to spend them quickly. Some cards — especially generic cash cards from Visa or MasterCard — will start accruing inactivity fees if they’re not used for a year, eating into their value. Inflation also makes cards less valuable over time. And if the grocery store closes or goes bankrupt, the gift card may be worthless.
Maybe consider emptying your savings on National Use Your Gift Card Day, a five-year holiday created by public relations executives and now supported by multiple retailers. The next one is Jan 20, 2024.
OR SELL
If you have gift cards you don’t want, one option is to sell them on sites like CardCash or Raise. Rossman says resale sites won’t give you face value for your card, but they’ll typically give 70 to 80 cents per dollar.
Some companies deactivate unspent gift cards after a certain period of time. AP
MONEY TRAIL
What happens to the money when the gift card is not used? It depends on the state where the retailer is incorporated.
When you buy a gift card, the retailer can use the money right away. But it is also a liability; retailers need to plan for the possibility that gift cards will be redeemed.
Each year, large companies calculate “damages,” which is the amount of gift card liabilities they believe will not be redeemed based on historical averages. For some companies, like Seattle-based Starbucks, damage is a big profit driver. Starbucks reports $212 million in revenue from damages in 2022.
But in at least 19 states — including Delaware, where many large companies are incorporated — retailers must work with state unclaimed property programs to return money from unspent gift cards to consumers. Money not recovered by individual users is spent on public service initiatives; in the eyes of the state, it should not go to the company because they do not provide services to get it.
HIS CLAIM
All 50 states and the District of Columbia have unclaimed property programs. Combined, they return about $3 billion to consumers each year, said Misha Werschkul, executive director of the Washington State Budget and Policy Center.
Werschkul said it’s difficult to find unspent gift card holders, but the growing number of digital cards that name recipients is helping. State unclaimed property offices jointly run the MissingMoney.com website, where users can search by name for any unclaimed property they’re owed, including cash from gift cards.
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Source: thtrangdai.edu.vn/en/
