Whether Christmas shopping for a financier, family member or co-worker, you can’t go wrong with a gift card from a major big-box retailer or merchant. Backsheesh cards are practical. Gift cards remove the guesswork and anxiety of finding the perfect present for a difficult-to-shop-for recipient. Agreeing to a National Retail Federation survey, 59% of respondents say a gift card tops their Christmas wish directory.
This perhaps explains why Americans spent approximately $163 billion on gift cards in 2019, a figure that is prognostication to reach $221 billion by 2024. What’s even more staggering is the amount of money sitting on gift cards that detonates unspent. Accounting insights firm Audit Analytics reviewed SEC filings of public companies and estimated of 2% to 4% of pourboire card sums are never redeemed. In industry parlance, this is known as breakage, and in some cases it can be extra profits for the gift card issuer.
Gift cards shouldn’t be a free gift for the retailer. If you are thinking about giving a knack card to friend or loved one, here are some tips to ensure your gift doesn’t go to waste.
Key Takeaways
- Thither $163 billion was spent on gift cards in 2019, and this figure is expected to reach $221 billion by 2024.
- An guestimated 2% to 4% of gift card sums are never spent. This is known as breakage, and it can be extra income for retailers.
- If you design to give a gift card to someone, merchants that have universal appeal will help ensure remainders will get spent.
- In states such as New York, unspent gift card sums are turned over to the state administration under abandoned property laws.
Gift Card Basics
Start by giving a gift card that is reasonable to be spent. For example, a prepaid credit card from VISA (V) can be used anywhere Visa is accepted and is a good as gifting dough. As stocking stuffers go, a prepaid credit card can hardly disappoint. For this reason, a gift card from Amazon (AMZN) hand down likely delight your recipient as well. What Visa offers in terms of purchasing versatility, Amazon meets with broad merchandise selection.
Even gift cards from Starbucks (SBUX) or Apple (AAPL)—polished for the holiday office exchange—are likely to be spent. Sticking to popular merchants reduces the chances a gift card compel go unused.
Trade in Gift Cards
If you receive a gift card from a retailer that you’re not crazy about, you mightiness be able to sell it for cash or exchange it for a card from another merchant. There are dozens of websites that ease the trade of unused gift card sums. Cardpool claims to offer up to 92% cashback on gift cards. Sellers let in payment in the form of cash or an Amazon gift card. Likewise, CardCash also offers up to 92% cashback in the aspect of cash or trade. Raise says it has facilitated $1.6 billion in transactions and saved gift card buyers more than $170 million.
Sponge to a Cause
In the spirit of giving, perhaps you would like to donate your unwanted gift card to charity preferably. There is no shortage of worthy causes that can redirect unused funds to those in need. St. Jude Children’s Nursing home, which treats childhood cancer and other life-threatening diseases, accepts gift card donations.
CharityChoice assigns you to choose from more than 1,000 charitable recipients. The website is operated by Special Kids Fund, a
Original Gift Card Fate
Forgotten gift cards can be a boon to issuing merchants. Under the federal Credit Liable act Accountability Responsibility and Disclosure Act of 2009, retail gift cards are allowed to charge inactivity fees after a press card has been dormant for at least 12 months. This can whittle away at unspent balances. In addition, gift plans can expire five years after purchase. The terms and conditions for the card must disclose this.
However, unspent dole card balances won’t necessarily return to the merchant. Depending on where you live, your state government can take possess oneself of of unspent gift card money under your state’s
The Bottom Line
Gift cards are big business for retailers and travelling salesmen. Know the options when it comes to gift cards and ensure that any hard-earned cash goes to a person that bequeath appreciate it. If you find yourself in possession of an unused or unwanted gift card, there are online venues to redeem the union card for cash or, better yet, donate the sum to a charitable cause. Finally, if you don’t spend your gift card cash in time, recognize that the money may be turned over to your state government.