- Up to $3 billion on gift cards go unused each year.
- Here's why you should use yours sooner rather than later.
Did you receive a gift card from someone over the holidays? Well, it's time to go shopping.
That sounds like the right move. Many people, however, let the dollars on their plastic go to waste: Each year, up to $3 billion worth of gift cards go unused, according to the Mercator Advisory Group, which provides data on the payments industry.
Any unspent money gets sent back to the retailer or bank, who are often happy to have it.
"The recipient's part of the bargain is to accept the giver's gift," said Dan Horne, a professor of marketing and associate dean for the School of Business at Providence College.
The good news is that around a decade ago, new rules added consumer protections to gift cards.
"By law, gift cards cannot expire for at least five years from the date of issuance," said Jill Gonzalez, a spokesperson for personal finance website Wallethub.
The site has ranked what it considers the best gift cards of 2020 here.
Still, you should use the card sooner rather than later, experts say.
"Inflation can eat the value of the gift, retailers can go out of business, recipients can move to a place which makes the card difficult to redeem," Horne said.
Some gift cards also have inactivity fees, Gonzalez said.
Try to make your gift card purchase add up to a little more than the balance so that you don't get stuck with a tiny amount on the card you'll wind up not using.
If you received a gift card for a store at which you don't shop, you have options.
"Swapping gift cards with a friend or family member is another way to get rid of unwanted cards," Gonzalez said.
More from Personal Finance:
You can buy steady retirement income. But not all agree it's a good idea
More people may soon have annuities in their 401(k) plans
Required minimum withdrawal changes may affect retirement accounts