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Here’s what happens to the unspent billions each year – Press Enterprise

By DEE-ANN DURBIN | AP Business Writer

Gift cards make great Christmas gifts, as long as you don’t put them in a drawer and forget about them after the holidays.

Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, accounting for a third of these sales.

Most of these gift cards will be redeemed. Paytronix, which tracks restaurant gift card sales, says about 70% of gift cards are used within six months.

But many cards – worth tens of billions of dollars – end up forgotten or unused. This is where life with a gift card gets complicated, with expiration dates or inactivity fees that can vary by state.

Here’s what you need to know about the gift cards you give or receive:

After clothing, gift cards will be the most popular gift this holiday season. Nearly half of Americans plan to donate, according to the National Retail Federation.

But much will not be spent.

Gift cards are displayed at a Target store in New York on Thursday, Dec. 21, 2023. Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, accounting for a third of these sales. (AP Photo/Richard Drew)

Gift cards get lost or forgotten, or recipients save them for a special occasion. In a July survey, consumer finance company Bankrate found that 47% of U.S. adults had at least one unspent gift card or voucher. The average value of unused gift cards is $187 per person, or a total of $23 billion.

Under a federal law that took effect in 2010, a gift card cannot expire for five years from the time it was purchased or the last time someone added money to it. Some state laws require an even longer deadline. In New York, for example, any gift card purchased after December 10, 2022 cannot expire for nine years.

Different state laws are one reason many stores have stopped using expiration dates altogether, says Ted Rossman, senior industry analyst at Bankrate.

Even though gift cards can take years to expire, experts say it’s always wise to spend them quickly. Some cards, including generic Visa or MasterCard charge cards, will start accruing inactivity fees if they aren’t used for a year, eating into their value. Inflation also makes cards less valuable over time. And if a retail store closes its doors or goes bankrupt, a gift card might become worthless.

Gift cards are displayed at a Target store in New York on Thursday, Dec. 21, 2023. Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation.  Restaurant gift cards are the most popular, accounting for a third of these sales.  (AP Photo/Richard Drew)
Gift cards are displayed at a Target store in New York on Thursday, Dec. 21, 2023. Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, accounting for a third of these sales. (AP Photo/Richard Drew)

Maybe consider emptying your stash on National Use Your Gift Card Day, a five-year-old holiday started by a PR executive and now supported by several retailers. The next one will take place on January 20, 2024.

If you have a gift card you don’t want, one option is to sell it on a site like CardCash or Raise. Rossman says resale sites won’t give you the face value of your cards, but will typically give you 70 to 80 cents on the dollar.

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