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Almost half (47 percent) of U.S. adults have at least one unused gift card, voucher or store credit, according to a recent Bankrate.com survey. The average value is $187 per person, which is up from $116 two years ago.
That really surprises me. I thought high inflation and the end of the pandemic would have led a lot more people to cash in their unused gift cards and credits. After all, if everything costs more and you have $187 gathering dust in your junk drawer, shouldn’t you use it?
Why gift cards go unused
Most of the time, I think we’re our own worst enemies. I have been guilty of this at times, too. When we first started these annual gift card surveys several years ago, I thought, ‘No way. I don’t have anywhere near that much in unused gift card value.’ I was embarrassed after I looked around and discovered that, at the time, I was sitting on way more than the national average in unused value.
In the years since, I have become a lot more intentional about my gift card usage. Although I do still have one gift card lying around — a $100 StubHub gift card I received last Christmas. I just haven’t found the right opportunity to use it. Sometimes other commitments got in the way. On other occasions, when I did attend an event, I discovered that the tickets were significantly cheaper or the seats were substantially better if I bought directly from the team, venue or a rival resale site.
Despite this, I remain resolved to use this card soon. I love hockey and my older daughter has never been to a professional game, so I want to use it this season.
Use them before you lose them
I certainly don’t want the card to fall by the wayside entirely. Although we didn’t ask this particular question this year, in 2022, we found that 29 percent of U.S. adults had let a gift card expire at some point, 25 percent had lost a gift card and 19 percent had failed to use a gift card before the business permanently closed.
At least most gift cards no longer expire. Per the CARD Act, which took effect in 2010, gift cards must be valid for at least five years. That’s the federal minimum standard — states can have even longer timetables. Most retailers have actually done away with expiration dates entirely.
When I see a gift card expiration date these days, it’s typically on one of those general-purpose gift cards that can be used anywhere Visa, Mastercard or American Express is accepted. And there’s really no excuse to hold on to one of those for years, since it’s basically the same as cash. You have numerous occasions to liquidate that value every single day.
Be mindful of gift card fees
I should note that gift cards are allowed (in almost every state) to charge inactivity fees after a year of dormancy. Even a modest $2.50 monthly inactivity fee could completely wipe out your $25 gift card within a year and 10 months.
Late last year, New York State passed the nation’s most consumer-friendly gift card law, which prohibits all gift card fees except for a one-time activation fee (not to exceed $9) for gift cards that can be used at multiple unaffiliated merchants (for example, a general-purpose, Visa, Mastercard or Amex gift card). Gift cards purchased in New York State on or after Dec. 10, 2022 can’t expire for at least nine years. And if the remaining balance is less than $5, the card can be exchanged for cash.
Do people even like gift cards anymore?
With all of this talk about unused gift cards, you might think that gift cards are waning in popularity. Quite the opposite, actually. The National Retail Federation recently reported that 55 percent of holiday shoppers would like to receive a gift card this year. That makes gift cards the most popular holiday gift, ahead of clothing and accessories (49 percent) and books/video games/other media (28 percent).
So if gift cards aren’t the problem, then it’s the way we use them (or don’t use them, as the case may be). I think there are two major reasons why people don’t use gift cards. One is that we just forget about them. This is pretty easy to fix. Take this as your homework assignment: Dig through your junk drawer, your wallet, your purse, your glove compartment… anywhere these gift cards might be hiding. Make a list of what you have and come up with a plan to use it.
That brings me to the second scenario. A lot of people tell me they don’t use gift cards because they don’t like the store or it’s not convenient to get there. Even in these cases, there are still some things you can do.
What to do with gift cards you can’t use yourself
These gift cards might be perfect for someone on your gift list, even if you don’t love the merchants yourself. Make a note in your calendar to use that card for your mom’s birthday present, your brother’s Christmas gift or whatever the appropriate occasion would be. You could either buy them a present with the card or perhaps even give them the card. Many gift cards are reloadable these days, so if you’re stuck with an odd remainder, there’s a good chance you can top that orphaned $9.76 up to a more socially acceptable $25 or $50 or whatever amount you choose.
Another idea would be to sell the gift card on a resale site such as CardCash or Raise. I have done this on several occasions. You won’t get full value, but something like 70 to 80 cents on the dollar is typical in my experience. That sure beats nothing, but to get full value for your gift card, it’s better to try to use it to buy something for yourself or a friend or relative.
The right way to give a gift card
Sometimes people feel that giving a gift card is a lame gift. They worry that it basically says, ‘I didn’t know what to get you, so here’s a gift card.’ Or they worry that it may be crass to give cash or a gift card in the first place.
But done right, I actually think there can be a personal element to gift card giving. Ideally, you’re not just forking over the equivalent of a few bucks you withdrew from the ATM. It’s best to put some thought into the type of gift card you’re giving.
For instance, giving a card to a store you know your recipient likes (or for a restaurant or entertainment experience that you think they’ll enjoy) goes a long way toward ensuring that the gift is ultimately used and appreciated. Sometimes you can even personalize a physical or digital gift card with special messages and unique imagery to further enhance the experience of receiving it.
Also: consider the amount. Giving a $25 gift card to Starbucks is a lot more useful than giving $25 to a fancy steakhouse where your recipient will end up spending upwards of $100 per person.
Speaking of Starbucks, the company’s 2022 annual report revealed that the coffee chain is sitting on more than $1.6 billion in unused gift card value. That’s incredible and illustrates the kind of scale we’re dealing with here. It also aligns with our survey findings that Americans, collectively, hold about $23 billion in unused gift cards and other store credits.
The bottom line
Find and use your gift cards. The holiday season is a great time to unlock this value. It’s an expensive time of year, so if you can check some people off your gift list without having to spend any money out of pocket, why wouldn’t you? Don’t forget about other credits, either. For example, travel vouchers often expire after a year or so.
The worst thing you can do is nothing, because your gift card or voucher might expire or you might lose it or forget about it entirely. And if the store or travel provider goes out of business, the value will probably be lost forever. These things don’t get more valuable over time. In fact, they lose value to inflation. Sometimes scammers even find ways to seize the funds, and you’re more likely to fall victim the longer you hold onto the card.
So take that gift card inventory and map out a spending plan. You might even consider taking photos of these cards or loading them into your phone’s mobile wallet (if possible). Then you’ll have them in your phone and they’ll be more top-of-mind when it’s time to use them. Not relegated to the back of your junk drawer.
Have a question about credit cards? E-mail me at firstname.lastname@example.org and I’d be happy to help.