Up to $4 Billion in Gift Cards Go Unused
Gift cards are big business. United States is the world’s biggest market for gift cards and they have been the most popular holiday item on shoppers’ lists for 13 years in a row. Amazon gift cards were the most popular last year, followed by cards from Visa, Walmart, Target and iTunes. Last year consumers spent $98 billion on gift cards, a 90% increase from 2005.
Merchants love selling gift cards for a variety of reasons. First, gift cards generate revenue in advance of providing products or services, helping with cash flow. They also build brand awareness and build relationships, make for an easy gift, and people who use gift cards also end up spending more money at the store.
But there is also another unexpected benefit to gift cards. About 2% to 4% of gift card money goes unused every year. That adds up to between $2 billion and $4 billion annually just in the U.S., CNBC reports.
If you have old gift cards that have been sitting in your drawer for a long time, don’t just assume they are useless by now. A 2009 federal consumer protection law stipulates that most gift cards cannot expire within five years from the date they were activated and also places limits on inactivity fees.
In some states merchants are required to cash out gift cards that have a small balance left, usually $5 or less. California is the most generous state, with a minimum requirement of $10.
Then there is always the option of selling gift cards in sites like Cardpool and Raise. You will get less than the face value, usually 5% to 30% less, but at least you get something out of the gift card if you don’t have any use for it.