Let’s face it, buying gifts for friends and family can be a frustrating. You always have the option of sending cash, but that is tacky and impersonal, right? In 1994, the gift card appeared as an answer to this eternal struggle. It is a piece of plastic that has an aura of thoughtfulness yet gives the lucky recipient flexibility to purchase something besides socks or an ugly sweater. A decade later, gift cards would become the 2nd most frequently given gift in the United States. Today it is hard to find someone who has not either purchased or received a gift card. With no signs of slowing down, the gift card industry represents one of the biggest profit centers for restaurants, retailers, and service businesses in the world.
The Birth of Unused Gift Cards: Thanks a lot Blockbuster
In 1994, after struggling with a ridiculous amount of counterfeiting of the then popular gift certificate (a piece of paper filled out by hand or by printer), the now defunct Blockbuster Movie Rental chain created plastic gift cards that resembled a credit card to replace the unsecured gift certificate. Ironically, it was Neiman Marcus that first came up with the idea, but failed to market them. At that time, the gift cards were single use. Then, in 2001, a small coffee company called Starbucks developed cards that could be used repeatedly. This started a chain reaction that would create a multi-billion dollar industry that is evident at every big box retailer, mall, and shop in the United States.
Unused Gift Cards: A $44 Billion Dollar Problem
Yes that is right, billion with a capital “B.” As it turns out, many of those gift cards only get partially redeemed or even worse, they may not get used at all. According to data from CardHub, a huge amount of wasted dollars lay dormant in unused gift cards that sit in drawers, wallets, and moving boxes. Most people assume that the billions on unused cards are set to make companies like Target, Amazon, and Old Navy giddy with joy. This is not necessarily true. These companies are unable to count these dollars as actual sales until they are used. This means that many retailers would like you to spend every last cent so they can book the profit. However, the SEC now has rules in place for public companies that allows them to take unused gift card dollars as income once they are reasonably assured the card will not be used. Keep in mind that each state has its own statutes regarding unredeemed gift cards as well. It is safe to say that most companies have an unused gift card gypsy that is watching your gift card balance with high hopes that you forget about it.
What to do with Unused Gift Cards?
It is bound to happen. You get a gift card from somewhere that you just simply will not use or would frankly prefer the cash. So what is there to do when you get a Target, Amazon, or “why would they give me this” gift card? Luckily there are dozens of service businesses that have sprung up to make turning unused gift cards into cash a relatively painless process. You can quickly and efficiently turn that unwanted and unused gift card into cash or convert it to a more preferable gift card. These gift card exchanges all vary in what types of cards they will accept and the value they will have on their exchanges. That being said, we have listed a few of the most popular for you to compare and contrast as you dump that unused gift card that Aunt Gerdie gave you for flag day.
Gift Card Exchanges
|CoinStar (Now CardPool)||Gift Card Rescue|
Feeling charitable? Why not send your unused gift cards to a worthy organization? These services below take unused gift card dollars and use them for the greater good. You may even be able to secure a tax deduction.
|Charity Gift Certificates||Plywood People|
Unused Gift Card Pitfalls
Inactivity Fees. Many unused gift cards begin to assess a penalty or fee if they remain unused for a certain amount of time. Language surrounding this policy can generally be found somewhere on the card itself. If not, you can use the number on the card to contact the company to verify the details of any inactivity fees. It is not uncommon to have a fee assessed after 12 to 18 months of inactivity. This is part of a law that was signed into effect in 2009. This same regulation gives you 5 years to spend the balance on a gift card before it is forfeited entirely.
Replacing Lost or Stolen Gift Cards
You were saving that gift card from Gap to get those skinny jeans you have been eyeballing for the past year. But when the time comes, you simply can not find the card. What are your options?
There is good news and bad news for you. If you lost your gift card or had it stolen, then you will probably find that most retailers are understanding and willing to help. That sympathy will fade quickly, however, if you are unable to prove you actually bought or received the gift card.
You will need to have at least 1 of the the following to have a shot at a replacement.
- The Gift Card Activation Receipt
- The Gift Card Number (which is typically found on the back of the card)
- An Image of the Front and Back of the Gift Card (ideally stored on your mobile phone)
But chances are, you do not have these things and are unable to get them, which leaves you without much luck and without those new skinny jeans. But perhaps this can serve as a lesson learned for next time: be mindful of these tips on the next gift card you receive so that it never happens again! Not willing to give up just yet? There are other long shot tactics you can always try, but we make no promises.
With any luck, this helped you demystify unused gift cards and hopefully put a little coin in your pocket or you were able to pick a much needed item from your favorite store. Happy gifting!