NEW YORK–Americans were expected to spend nearly $30 billion on gift cards this holiday season, but billions of those dollars will go unspent if the past is any indicator, according to a new analysis.
After clothing, gift cards are the second-most popular holiday gift.
“But many cards — tens of billions of dollars’ worth — wind up forgotten or otherwise unused,” the Associated Press reported. “That’s when the life of a gift card gets more complicated, with expiration dates or inactivity fees that can vary by state.”
Restaurant Cards Most Popular
Citing data from the National Retail Federation, the AP said restaurant gift cards are the most popular, making up one-third of those sales. The report noted that most of those gift cards will be redeemed, with analysis by Paytronix, of restaurant gift card sales finding around 70% of gift cards are used within six months.
The AP noted that a July 2023 survey by Bankrate found 47% of U.S. adults had at least one unspent card or voucher with an average value of $187. That’s a total of $23 billion.
Varying Expiration Dates
The report reminded that under a federal law that went into effect in 2010, a gift card can’t expire for five years from the time it was purchased or from the last time someone added money to it. Some state laws require an even longer period. In New York, for instance, any gift card purchased after Dec. 10, 2022, can’t expire for nine years, the AP said.
Meanwhile, while it may take gift cards years to expire, some cards — especially generic cash cards from Visa or MasterCard — will start accruing inactivity fees if they're not used for a year.
Consumers also have one other option: Sell their gift card on a site like CardCash or Raise. The resale sites won’t give the seller face value for your cards, but they will typically give 70 to 80 cents per dollar.
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