Put Your Gift Cards to Work Before They’re Lost to Time!

Got a stack of gift cards from the holidays? You’re not alone. But before they disappear into the depths of your wallet or that ‘safe spot’ you’ll forget about, let’s talk. Gift cards might seem like free money, but they come with quirks—hidden fees, store policies, and even expiration risks. Let’s make sure every penny gets put to good use, minus the surprises!

As the holiday glow fades and the grind of the New Year kicks in, it’s easy to overlook those gift cards tucked into stockings or gift bags. But before you fully dive into your to-do lists and routines, take a moment to round up those cards. They might just be the ticket to easing back into reality—with a little treat for yourself or a practical purchase you’ve been putting off.

Why You Should Use Gift Cards Quickly

In 2024 alone, Americans spent a staggering $308 billion on gift cards, but here’s the kicker: roughly $27 billion worth will go unredeemed.

The Stats You Need to Know

43% of Americans currently have unused gift cards, with an average value of $244 per person collecting dust.
71% of people hang onto gift cards for at least a year, increasing the risk of misplacement or expiry.
Gift card fraud is on the rise, with 26.6% of fraud victims reporting losses involving gift cards.

Before those cards disappear into a drawer or (gasp!) accidentally land in the trash, there are some things you need to know about them and how best to use them. Gift cards aren’t just free money—they often come with expiration dates, fees, or changing policies that could chip away at their value. Plus, holding onto them too long means risking forgetfulness, fraud, or losing out entirely if the business closes.

The Hidden Costs of Holding Onto Gift Cards

You know the deal—a well-meaning person gives you a gift card because they couldn’t quite figure out what you’d love. Now, it’s up to you to actually use it. But before you tuck it away “for the perfect purchase,” let’s take a moment to consider the potential hidden costs.

Not the Same as Cash

A gift card might seem like cash, but it’s not. It’s store credit, and it works differently. Let’s say you pop into Best Electronics, excited to buy the latest gizmo for $79 (with tax). You hand over your $100 gift card, expecting change. Spoiler: you won’t get any. Instead, you’ll get a gift card with $21 left on it.

Now, let’s say you realize that gadget isn’t as great as you thought. You’ve got the receipt, the unopened box, and you head to return it. But surprise—if you used a gift card, they’ll only refund you the lowest sale price within the last 30 days. So instead of getting your full $79 back, you’ll get $59. A bit frustrating, right? It happens more than you’d think.

Bankruptcy Blues

And here’s a sobering thought: if the store you’ve got a gift card for goes bankrupt, that card could be worthless. The court may rule that all outstanding gift cards are void. It might seem unfair, but remember—you’re holding store credit, not cash. And that means, yes, they can take it away.

Diminishing Value

A gift card is worth $100 on paper, but when you try to redeem it, you might find it’s worth less than you expected. Why? Those pesky fees. States still allow companies to charge dormancy, maintenance, or inactivity fees that can eat away at your balance over time. And don’t forget—the card might not be as new as it looks. Aunt Sue’s card could’ve been handed down from Cousin Sam, who won it in a raffle years ago. Plus, depending on where the card was purchased, it could even have an expiration date.

Usage Limitations

You also might be limited in how you can use your gift card. Some cards can’t be used for online purchases, or for catalog items. And forget trying to sell or transfer it—many stores prohibit that. Plus, if you’re hoping to apply it to a store credit card or redeem it for cash, think again. These restrictions are just some of the ways holding onto a gift card can limit your options.

Know the Laws: Gift Card Protections by State

In the United States, Gift Cards are generally protected by federal law, specifically the Credit Card Accountability Responsibility and Disclosure (CARD) Act of 2009, which prohibits Gift Cards from expiring within 5 years of activation. However, states have additional rules that offer more protections for consumers. Here are some states where Gift Cards cannot expire:

California: Gift Cards cannot expire, and fees are also regulated. The state has strong consumer protections for Gift Cards.
Connecticut: No expiration date can be set on Gift Cards, and fees are restricted.
Massachusetts: Gift Cards cannot have expiration dates, and fees are limited to dormancy fees under certain conditions.
Michigan: Gift Cards must remain valid for at least 5 years from the date of purchase, and they cannot expire sooner.
New York: Gift Cards cannot have expiration dates, and fees can only be charged after 12 months of inactivity.
Washington: Gift Cards cannot expire, and dormancy fees can only be applied if the card has been inactive for more than a year.

States like Florida, Illinois, and Virginia also have restrictions, typically limiting the imposition of fees and prohibiting expiration before a set time, but the rules vary based on the type of card and its specific terms.

It’s always a good idea to call the toll-free number on the back of the card to check its current value.

Tips for Maximizing Your Gift Cards

Don’t let your gift cards become part of the billions of unclaimed dollars each year. They’re more than just a piece of plastic—they’re a tangible opportunity to save money and enjoy thoughtful purchases. Treat them like cash, and make every dollar count!

Track Them

It’s easy to lose track of gift cards in the shuffle of daily life. Keep a dedicated list, either digitally (using your Notes app or mobile apps like Gyft) or physically (a small notebook or envelope in a secure spot). Tracking helps you know exactly what you have, preventing them from getting lost or forgotten in drawers or wallets.

Prioritize Use

Some gift cards, especially promotional ones, may come with expiration dates or fees that kick in after a certain period of inactivity. Start with these to avoid losing their full value. Similarly, focus on high-value cards that can help cover significant portions of upcoming purchases—think a $100 card for a big-box store versus a $10 card for a café.

Combine Purchases

If the card doesn’t cover the entire cost of what you need, think strategically. Combine it with discounts, sales, or rewards points to maximize savings. For instance, use a gift card during a seasonal sale to stretch its value or stack it with coupons for even greater savings.

Be Scam-Savvy

Scammers often target gift cards, so stay vigilant. Never share the numbers or PINs on the back of the card unless you are actively redeeming it with a trusted retailer. Be cautious of any communication (email, text, or phone) requesting gift card details to “resolve an issue” or claim a prize—these are almost always scams. When purchasing gift cards, inspect physical cards for tampering to ensure the PIN is concealed, and only buy from reputable sources.

Think Ahead

Consider using gift cards to offset recurring expenses or big-ticket items. For example, if you’ve received cards for major retailers, allocate them for future purchases like groceries, household essentials, or electronics. This strategic approach makes gift cards a valuable tool in your budgeting arsenal.

Get Creative

If a gift card doesn’t align with your interests, explore ways to exchange or repurpose it. You can trade it for a more suitable card through services like CardCash or Raise, or regift it (tactfully!) to someone who would appreciate it more.

How to Say “Thank You” After Using a Gift Card

And remember, after using the gift card, take a moment to thank the giver and share what you bought. A quick text or note lets them know their gift was appreciated and put to good use. It’s a small but thoughtful way to show your gratitude!

Question: Have you ever held onto a gift card, waiting for just the right moment to spend it? What did you do with it? Did you end up using it on something creative, practical, or totally unexpected? We’d love to hear your stories.