What happens to gift cards that are never used?

Unused gift cards typically turn into pure profit for retailers through a process called "breakage". After a set period of inactivity (usually 6-24 months), the, retailer moves the liability of the unspent balance to their income account, essentially keeping the money without providing goods or services. In some jurisdictions, these funds may eventually be turned over to the state as unclaimed property.

What can happen to a gift card if you don't use it for years?

The gift card remains the property of the original owner. The person who bought or was gifted the card. They don't expire. They can be used indefinitely until the cash amount of the card is fully spent. They can be sold for less money than the cards value on secondary internet sites too.

What happens to unused gift cards?

Over time, unused gift cards are accounted for as "breakage," representing the estimated funds that will never be redeemed. Companies often recognize this as revenue, contributing to their profits. In many states, unclaimed gift card funds are subject to escheat laws.

What to do with gift cards you will never use?

3 Things to Do with Unwanted Gift Cards

1. Sell Them Online for Cash. A unique way to get rid of unwanted gift cards is to tell them online for cash. ...
2. Sell Them to a Friend. The easiest way to get rid of an unwanted gift card is to sell it to a friend. ...
3. Donate or Regift Them.

Should you throw away gift cards?

“Though not what the gift giver intended, it's better to transfer the value of the gift card to someone else than to toss the value entirely,” she says. If you choose to resell your gift card, do so with caution and be wary of third-party services.

Why Do Scammers Want Gift Cards?

Is it possible to return unused gift cards?

The majority of retailers can only help you return a gift card for cash if you have a receipt, so it's a good idea to get your hands on this first before attempting an exchange. If you're looking for practical steps on how to exchange gift cards for cash, here's a simple guide to get you started.

Is it illegal for gift cards to expire in the UK?

Yes, it's legal to include an expiry date on gift vouchers. But, there are some key legal rules you need to follow to make sure your expiry date is enforceable and fair: Transparency: The expiry period must be communicated clearly to the customer at the point of purchase.

How long can you keep a gift card without using it?

Federal regulations

Overview of federal law: The Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009 established federal guidelines for gift card expiration. According to this law, gift cards cannot expire within five years from the date of issuance.

What is the lifespan of a gift card?

That's because laws passed in 2019 mean gift cards have to be valid for three years after the day they were supplied or bought. But that doesn't apply to all gift cards — some have to be activated within a certain time frame, or the funds could expire.

What percentage of gift cards never get redeemed?

Globally, up to 20% of all gift card balances go unspent, making it a significant source of profit for businesses. What is the average redemption rate for gift cards? The average redemption rate for gift cards varies by industry but typically falls between 80-90%, meaning a notable percentage remains unspent.

Can you recover money from an expired gift card?

Be sure to check your cardholder agreement to see if you can get back the money that may still be on the card when it expires. The rules for gift cards are different. Gift card funds must be good for at least five years under federal law, and some states laws give you more time.

Do companies make money from unused gift cards?

There are also laws regarding expiration dates on gift cards in the United States. Unused cards are very profitable for businesses because the value of the remaining balance on unused gift cards is 100% profit for the company.

Is there anything you can do with expired gift cards?

Contact the retailer directly

Many companies will extend expired cards as a goodwill gesture, especially if you're a regular customer or if the card only recently expired. Although they're under no obligation to extend gift cards, many retailers may choose to do so.

Which gift cards don't expire?

Gift Cards With No Expiration

• Gap Gift Card $100. Item: 2634007. ...
• Groupon Gift Card $100. Item: 1204189. ...
• Starbucks Gift Card $100. Item: 2509196. ...
• Staples eGift Card $20. Item: 2073274. ...
• Kohl's Gift Card $ 100. Item: 2719323. ...
• Gap Gift Card $200. Item: 2634006. ...
• Disney Gift Card $100. Item: 2733028. ...
• Starbucks Gift Card $200. Item: 2509187.

When did it become illegal to have gift cards expire?

The 2009 CARD Act (a federal law) ensures that gift cards cannot expire within five years of activation, but many states enforce stricter rules.

What happens if you never use a gift card?

While it may take gift cards years to expire, experts say it's still wise to spend them quickly. Some cards — especially generic cash cards from Visa or MasterCard — will start accruing inactivity fees if they're not used for a year, which eats away at their value. Inflation also makes cards less valuable over time.

How do I know if a gift card is still good?

Once you visit the website found on the back of the card, it will have fields for information pertaining to your card. This will usually include your gift card number and another numeric code like the expiration date or access code.

What to do with an unwanted gift card?

With unwanted gift cards, you can sell them for cash on specialized websites (like CardCash or Gameflip) or marketplaces, trade them for cards you'll use, regift them, donate them to charities, or use them for your own purchases to avoid losing the value, especially since major retailer cards sell better. 

Do expired gift cards have to be honoured?

Businesses do not need to honour the gift card after a valid expiry date has passed.

What are the risks of buying gift cards?

The cards may be counterfeit or stolen, so be sure to buy gift cards from sources you know and trust. If you are buying a card from a retailer, check it before purchasing. Make sure that the codes on the back of the card haven't been scratched off to show the PIN number. Be sure to read the gift card's fine print.

Can you convert gift cards back into money?

One popular site is called Cardcash, where users can either exchange cards for different ones or trade them in for cash — just not for the full value. A $50 Walmart card might be worth $40 to $45 cash. Or, it could be traded for a $40 Amazon gift card. Users can also sell cards on Giftcash.

Can I return an unused gift card to the store?

Most retailers, if not all, don't allow gift card returns. No-return policies are aimed at helping prevent fraud and misuse of the system. However, you may be able to exchange it for a different gift card.