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 one-third of those sales.
However, many gift cards end up forgotten or unused, resulting in tens of billions of dollars’ worth of unspent money. According to a survey by the consumer finance company Bankrate, 47% of U.S. adults had at least one unspent gift card or voucher, with an average value of $187, totaling to $23 billion.
Under a federal law that went into effect in 2010, gift cards can’t expire for five years from the time of purchase or from the last time someone added money to it. Different state laws may require an even longer expiration period, with some states like New York mandating a nine-year expiration limit for gift cards purchased after a certain date.
While gift cards may take years to expire, experts advise spending them quickly. Some cards, especially generic cash cards from Visa or MasterCard, can start accruing inactivity fees if left unused for a year. Inflation can also make cards less valuable, and if a retail store closes or goes bankrupt, a gift card could become worthless.
For individuals who have unwanted gift cards, selling them on a site like CardCash or Raise is an option, although resale sites typically give only 70 to 80 cents per dollar, according to senior industry analyst Ted Rossman.
When a gift card goes unused, the fate of the money depends on the state where the retailer is incorporated. Retailers in at least 19 states, including Delaware, must work with state unclaimed property programs to return money from unspent gift cards to consumers.
All 50 states and the District of Columbia have unclaimed property programs and collectively return around $3 billion to consumers annually. The growing number of digital cards that name the recipient makes it easier for state unclaimed property offices to track holders of unspent gift cards.
With an estimated $30 billion being spent on gift cards this holiday season, it’s important for consumers to be aware of the expiration dates, inactivity fees, and their options for unloading unwanted gift cards. It’s a reminder to use the gift of time wisely and check for unclaimed property to claim any unspent gift cards.