Gift cards make great stocking stuffers — just as long as you don’t stuff them in a drawer and forget about them after the holidays.
As the holiday season approaches, gift cards are once again proving to be the go-to choice for many well-intentioned gift-givers. According to the National Retail Federation, Americans are projected to spend nearly $30 billion on gift cards this holiday season, with restaurant gift cards leading the pack.
However, a significant portion of this generosity may go to waste, as billions of dollars worth of gift cards end up forgotten or unused.
Gift cards, often tucked into stockings or presented in festive envelopes, are expected to be the second most popular gift this holiday season, following clothing. Despite their popularity, a substantial number of gift cards remain unspent, either lost, forgotten, or held onto for a special occasion. A survey by Bankrate revealed that 47% of U.S. adults had at least one unspent gift card, amounting to an average value of $187 per person, totaling a staggering $23 billion in unused gift cards.
To address the issue of unused gift cards, federal law stipulates that a gift card cannot expire for at least five years from the time of purchase or the last reload. Some states, such as New York, extend this period to nine years for cards purchased after a specific date. However, despite the extended expiration timelines, it is advisable to use gift cards promptly to avoid potential issues such as inactivity fees, loss of value due to inflation, or the risk of a retailer closing shop.
While gift cards may have a lengthy expiration period, experts recommend using them sooner rather than later. Certain cards, especially generic ones from major providers like Visa or MasterCard, can start accruing inactivity fees if left unused for a year. Additionally, inflation can erode the purchasing power of the card over time, and in the unfortunate event of a retail store closure or bankruptcy, the gift card could become worthless.
To encourage the prompt use of gift cards, National Use Your Gift Card Day was established. This initiative, backed by various retailers, suggests clearing out your gift card stash on January 20, 2024, to ensure that the joy of giving is maximized and the value of the cards is not lost over time.
For those with unwanted gift cards, selling them on platforms like CardCash or Raise is a viable option. While resale sites may not offer face value, they typically provide 70 to 80 cents per dollar, allowing users to recoup some of the card's value.
When gift cards go unclaimed, the fate of the remaining funds depends on the state where the retailer is incorporated. In at least 19 states, retailers must work with state unclaimed property programs to return the money to consumers. Consumers can claim their unspent gift card funds through state unclaimed property programs, which collectively return around $3 billion to consumers annually.