Present playing cards make great stocking stuffers — simply so long as you don’t stuff them in a drawer and neglect about them after the vacations.
People are anticipated to spend nearly $30 billion on gift cards this vacation season, in accordance with the Nationwide Retail Federation. Restaurant present playing cards are the preferred, making up one-third of these gross sales.
Most of these present playing cards will probably be redeemed. Paytronix, which tracks restaurant present card gross sales, says round 70% of present playing cards are used inside six months.
However many playing cards — tens of billions of {dollars}’ price — wind up forgotten or in any other case unused. That’s when the lifetime of a present card will get extra difficult, with expiration dates or inactivity charges that may fluctuate by state.
Right here’s what to know in regards to the present playing cards you’re giving — or getting:
LOVED, BUT LOST
After clothes, present playing cards would be the hottest current this vacation season. Almost half of People plan to offer them, in accordance with the Nationwide Retail Federation.
However many will stay unspent.
Present playing cards get misplaced or forgotten, or recipients hang on to them for a special occasion. In a July survey, the buyer finance firm Bankrate discovered that 47% of U.S. adults had at the very least one unspent present card or voucher with a median worth of $187. That’s a complete of $23 billion.
THE GIFT OF TIME
Underneath a federal legislation that went into impact in 2010, a present card can’t expire for 5 years from the time it was bought or from the final time somebody added cash to it. Some state legal guidelines require a good longer interval. In New York, for example, any present card bought after Dec. 10, 2022, can’t expire for 9 years.
Differing state legal guidelines are one cause many shops have stopped utilizing expiration dates altogether, says Ted Rossman, a senior business analyst at Bankrate.
USE IT OR LOSE IT
Whereas it might take present playing cards years to run out, consultants say it’s nonetheless sensible to spend them shortly. Some playing cards — particularly generic money playing cards from Visa or MasterCard — will begin accruing inactivity charges in the event that they’re not used for a 12 months, which eats away at their worth. Inflation additionally makes playing cards much less worthwhile over time. And if a retail retailer closes or goes bankrupt, a present card could possibly be nugatory.
Maybe think about clearing out your stash on Nationwide Use Your Present Card Day, a five-year-old vacation created by a public relations govt and now backed by a number of retailers. The following one is Jan. 20, 2024.
OR SELL IT
If in case you have a present card you don’t need, one choice is to promote it on a web site like CardCash or Elevate. Rossman says resale websites gained’t provide you with face worth on your playing cards, however they may usually give 70 to 80 cents per greenback.
THE MONEY TRAIL
What occurs to the cash when a present card goes unused? It depends upon the state the place the retailer is integrated.
Once you purchase a present card, a retailer can use that cash straight away. However it additionally turns into a legal responsibility; the retailer has to plan for the likelihood that the present card will probably be redeemed.
Yearly, large corporations calculate “breakage,” which is the quantity of present card legal responsibility they consider gained’t be redeemed based mostly on historic averages. For some corporations, like Seattle-based Starbucks, breakage is a large profit-driver. Starbucks reported $212 million in income from breakage in 2022.
However in at the very least 19 states — together with Delaware, the place many large corporations are integrated — retailers should work with state unclaimed property packages to return cash from unspent present playing cards to shoppers. Cash that isn’t recovered by particular person shoppers is spent on public service initiatives; within the states’ view, it shouldn’t go to corporations as a result of they haven’t offered a service to earn it.
CLAIM IT
All 50 states and the District of Columbia have unclaimed property packages. Mixed, they return round $3 billion to shoppers yearly, says Misha Werschkul, the manager director of the Washington State Finances and Coverage Middle.
Werschkul says it may be tough to seek out the holders of unspent present playing cards, however the rising variety of digital playing cards that identify the recipient helps. State unclaimed property workplaces collectively run the web site MissingMoney.com, the place shoppers can search by identify for any unclaimed property they’re owed, together with money from present playing cards.
