Gift vouchers are a popular choice for holiday presents, effortlessly slipping into festive stockings. However, their convenience is often overshadowed by the tendency to set them aside and neglect their existence post-celebration.
The holiday season is poised to see Americans spend a staggering sum nearing $30 billion on gift vouchers, as per data from the National Retail Federation. Dining out seems to be a favored treat, with restaurant gift vouchers accounting for a third of this expenditure.
The good news is that the majority of these gift vouchers find their way to use, with Paytronix reporting that about 70% are redeemed within the first six months. But there’s a flip side: a significant value in gift vouchers goes to waste as they are forgotten or left untouched. These unused cards can become complex to handle due to varying expiration dates and potential inactivity fees, which differ from state to state.
It’s essential to be well-informed about the gift vouchers you’re either gifting or receiving:
After clothing, gift vouchers are set to be the second most sought-after gift this holiday season. The National Retail Federation indicates that nearly half of all Americans are considering them as presents. Despite their popularity, many vouchers will inevitably go unredeemed.
Gift vouchers can fall into oblivion, be misplaced, or be saved for too long by recipients waiting for a perfect occasion to use them. A Bankrate survey in July revealed that close to 47% of U.S. adults possess at least one unused gift card or voucher, with an average worth of $187, amounting collectively to an astonishing $23 billion.
Federal legislation enacted in 2010 mandates that gift vouchers should not expire until five years after their purchase date or the last time they were recharged. Some states go even further; New York, for instance, requires that gift vouchers bought post-December 10, 2022, should not expire for nine years.
Ted Rossman, a senior industry analyst at Bankrate, notes that due to these varying state legislations, many retailers choose to do away with expiration dates altogether.
Experts advise that it’s best to utilize gift vouchers swiftly. Certain types, like general cash cards from providers such as Visa or MasterCard, may start accumulating inactivity charges after a year of non-use, which can deplete their value. Additionally, inflation can erode the purchasing power of these cards over time. Moreover, if a retailer shuts down or declares bankruptcy, the value of a gift voucher can instantly plummet to zero.
To avoid such scenarios, consider spending your gift vouchers on National Use Your Gift Card Day, an event started by a PR executive and now supported by numerous retailers, with the next occasion set for January 20, 2024.
If you find yourself with a gift voucher you don’t intend to use, selling it on a marketplace like CardCash or Raise is an option. Rossman points out that while you won’t get the full value back, you can expect to receive around 70 to 80% of its worth.
What happens to the funds from unused gift vouchers? The answer is determined by the state where the retailer is registered. While retailers can immediately benefit from the sale of a gift voucher, they must also account for the liability of potential redemption.
All 50 states, along with the District of Columbia, run unclaimed property programs that annually return approximately $3 billion to consumers, according to Misha Werschkul, executive director of the Washington State Budget and Policy Center.
Werschkul mentions that it can be challenging to track down the owners of unspent gift vouchers, but the increasing prevalence of digital vouchers, which often identify the recipient, is proving helpful. For those seeking unclaimed assets, including funds from gift vouchers, the joint state-run website MissingMoney.com offers a searchable database by name.
This material is based on information provided by the Associated Press and has been adapted for new reporting and educational purposes.
Gift cards are a popular present, with Americans expected to spend nearly $30 billion on them during the holiday season. Restaurant gift cards are particularly favored. However, a significant amount goes unused, with an average of $187 per person in unspent gift cards amounting to a total of $23 billion. Federal law mandates that gift cards cannot expire for at least five years from purchase or the last time money was added. Some states, like New York, extend this period even further. Despite varying expiration policies, experts recommend using gift cards promptly to avoid inactivity fees, which can deplete their value, and to prevent loss of value due to inflation or retailer bankruptcy. Unused gift card funds are subject to state unclaimed property programs, and consumers can search for unclaimed funds, including from gift cards, on MissingMoney.com. Resale sites offer an option to sell unwanted gift cards, usually at a rate of 70 to 80 cents on the dollar.
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