The Untold Story of Gift Cards: What Really Happens to the Billions Left Unused Every Year

This holiday season, Americans are projected to spend close to $30 billion on gift cards, with restaurant gift cards being the most sought-after, making up one-third of those sales. However, despite the popularity of these cards, Paytronix, a company that tracks restaurant gift card sales, indicates that around 70 percent of gift cards are used within six months of purchase.

Unfortunately, many of these gift cards, amounting to tens of billions of dollars, end up being forgotten or left unused after the holidays. This leads to a more complex situation for the life of the gift card, as expiration dates and inactivity fees come into play, and these can vary from state to state.

It’s important for consumers to keep track of their gift cards and use them in a timely manner to avoid any potential loss of value. In a survey conducted by Bankrate, it was discovered that 51 percent of consumers have held onto a gift card for a year or longer without using it. This can result in the card losing value due to fees or expiration.

In some cases, however, there are state laws in place to protect consumers from losing the full value of their gift cards. For instance, in California, gift cards with a cash value of less than $10 are redeemable for cash. Other states, such as Massachusetts, have laws that prohibit expiration dates or fees on gift cards.

In efforts to combat the issue of unused gift cards, some retailers have introduced digital gift cards, which can be stored on a smartphone or within an app, making them less likely to be forgotten or misplaced. Additionally, some companies have implemented policies that allow consumers to exchange their gift cards for a different retailer’s card, although this may come with a fee.

With the increasing popularity of gift cards, it’s essential for consumers to be aware of the potential risks and take proactive measures to ensure the full value of their cards is utilized. This includes keeping track of expiration dates, familiarizing themselves with state laws regarding gift cards, and considering digital options as an alternative to traditional physical cards.

As the holiday season approaches, it’s important to remember that gift cards can make great presents, but it’s equally important to ensure they are used in a timely manner to avoid any potential loss of value. By staying informed and proactive, consumers can make the most of their gift card purchases and avoid any unnecessary fees or expiration issues in the future.

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