Don’t sit on gift cards
If your kids are sitting on a stash of gift cards they received over the holidays, my advice to them is to strike quickly and enjoy the shopping spree. After all, what kid doesn’t like spending gift cards?
But all too often, kids bury the cards in the sock drawer where they’re lost or forgotten for ages. Or, they’ve held on to the card so long that it’s expired or the store is no longer in business, which in the interest of full disclosure has happened to me a couple times.
There are also plenty of occasions where a gift card is socked away even though it has unredeemed funds.
“This is real money so don’t let it go to waste,” said Ted Rossman, senior industry analyst with Bankrate.com and CreditCards.com.
A recent Bankrate survey found that about half of the adults surveyed — from millennials to baby boomers — are sitting on unused gift cards with an average value of $116. The respondents also acknowledged they’ve been holding onto store vouchers and credits for at least one year, amounting to about $15 billion in outstanding value altogether when added to gift card balances.
Moreover, about half of the consumers acknowledged losing gift cards, letting them expire or losing out because the merchant is no longer in business.
If your child has an unused gift card from a store he or she doesn’t like, consider selling it or trading it on gift card exchanges, such as CardHub, Raise and CardCash.
Among those ages 18 to 24 that comprise Generation Z, a troubling 46% said they had unused balances on gift cards, vouchers and store credits. Still, that was slightly better than their elders, particularly the 56% of millennials who reported having unused gift cards, vouchers and credits, according to Bankrate.
If your child has an unused gift card from a store he or she doesn’t like, consider selling it or trading it on gift card exchanges, such as CardHub, Raise and CardCash.
At CardCash, for example, gift cards can be purchased at a discount from the face value or sold for up to 92% of its value. Generally, you can even sell a partially used gift card.
I advise checking out several card exchanges to get the best price for your card.
If your kids don’t want to go that route, consider using it to buy a gift for someone else, or regift it to a friend or family member on a birthday.
Finally, parents encourage your child to donate an unused gift card to a favorite charity that can put the money to good use. For example, CharityChoice allows you to donate unwanted store and restaurant gift cards to your choice of about 1,000 participating charities.
Keep in mind that the federal Credit Card Accountability Responsibility and Disclosure Act, which took effect in 2010, mandated that gift cards cannot expire for at least five years, and inactivity fees cannot be charged for at least the first 12 months from the purchase date.
The inactivity fee generally amounts to $2.50 a month until the card balance hits zero. Any purchases on the card will stop the inactivity fee from being charged for an additional 12 months.
Rossman said that some states have gone beyond the federal law by either banning inactivity fees altogether or prohibiting them for two years or more, although in practice, many — but not all — retailers have done away with expiration dates and inactivity fees.