You Won’t Believe How Much Money Is Wasted On Unused Gift Cards

unused gift cards

Even though most people are loath to admit it, though some do willingly, we waste things as a sign or status. Or, pride. It may be due to utter obliviousness as well. Or worse, just because we can. When I was a child, it was popular for people to complain about gifts they didn’t want and then throw them away — like Christmas fruit cakes or sweaters. I quite like fruit cakes, so I never understood the pop culture-oriented animus toward them.

It seems that the 21st century equivalent of the unwanted fruit cake is the gift card. A gift that elicits an eye roll of annoyance, contempt or appreciative indifference once received. About 85% of people who receive a gift card typically use them within two months of receipt. Yet, 85% of gift card redeemers only use about 34% of the face value available on their gift cards.

Gift Card Spillage

It is just a waste of money. Literally a waste of money, since the object of a gift card is to digitally transfer money for gifting purposes. It is not a new phenomenon either. People have been lighting money on fire via partially used gift cards, also known as spillage, for decades. Consumers spent about $20 billion on gift cards in 1999 and more than $130 billion in 2015. It was over $140 billion in 2016, and, in 2018, over $160 billion.

Still, as the old song says, “more money, more problems.” Over $45 billion in gift card value has been left unused through spillage since 2005. There was over a billion dollars’ worth of gift card spillage in 2015 alone. People lighting so much money on fire does not make any sense. Especially since most people are just asking to waste money. Over 60% of people say they wanted gift cards given to them as gifts during the holidays.

The waste of so much money is a shame since there are consumer laws precisely to prevent such waste. That’s right. There are laws in place to help you use every cent available on a gift card as efficiently as possible.

The CARD Act of 2009

Before 2009, businesses were legally allowed to charge consumers penalty fees spillage. Gift cards were only viable for weeks, months, or on a time-frame beneficial to the business that issued it. Some gift cards didn’t even have their expiration dates printed on the card or easily explained. It was a lucrative way for businesses to punish you for wasting a gift card that you voluntarily bought.

Consumers felt rushed, pressured, and obliged to use gift cards on the issuing company’s time frame. The CARD Act, or Card Accountability, Responsibility, and Disclosure Act, changed all of that in May 2009. After the passage of the CARD Act, gift card issuing companies could not allow gift card values to expire for five years after the purchase date. Or, on the last date you loaded money to the card.

The expiration date from the first date of purchase must be visible or easily knowable to the purchaser. Issuers can only charge one fee a month for gift card use, and an inactivity fee after a year of non-use. So, after so much legislative protection to allow consumers to use a gift card on their terms, why do they waste them?

Spillage Justifications

Unless issued by a financial institution for all -purposes, many gift cards are only redeemable for specific products or at specific retailers. These are known as, “loop gift cards.” Many people accept such gift cards and then don’t use them because they can only redeem them for something they don’t want. Or, the business for the gift card closed. In most cases, people just simply forget they have the gift cards or misplace them.

Make Money From Wasted Money

Buy gift cards for people who you know will use them. If you receive an unwanted gift card, consider giving it to someone who will appreciate it. You can also sell or trade unwanted gift cards on various gift card exchange sites. Like Cardpool, CardCash, and GiftCards. Otherwise, you are lighting money on fire.

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Posted in: Money, Personal Finance

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