20% of Gift Cards Are Left Unused After 1 Year. How About Yours?

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It’s now been a month since Christmas. Have you spent your gift cards yet? The odds are that you haven’t, as only 38% of all gift cards overall have been redeemed after a month. This is from a neat collection of gift card statistics from Zachary Crockett and The Hustle.

Here’s a chart of gift card redemption rates over time. Initially, it surprised me that less than 80% of gift card are used up after 12 months. That means 1 out of 5 are sitting there collecting dust after an entire year. Then I looked over at my own stack of unused gift cards, and realized that I am part of the problem!

This also explains why many gift cards can be discounted 10% to 20% in stores. In addition to the embedded profit margins of each specific business, around 6% of gift cards are never used. On top of their normal profits, Starbucks makes over $100 million a year from gift cards bought and never used! They literally get paid for doing nothing.

This means ~30% of gift cards that are unused after a year will never be used. Perhaps the best move is to give yourself a year and sell whatever hasn’t been used within a year. (I apply this same rule by throwing out clothes that aren’t worn after four seasons have passed.) Here are a bunch of sample quotes from card-buying site CardCash using nice round $100 numbers:

Look for extra value by exchanging for gift cards that you always use up. CardCash offered 3.5% extra over the cash offer if I exchanged into an Amazon gift card, 5% extra for Home Depot, and 7% extra for Lowe’s gift card. I have a 100% usage rate for Amazon gift cards, so that works well for my spending habits.

We all know that the solution is to give cash, but for whatever reason, giving cash in American culture is not standard practice. (Maybe some red envelopes would make it feel more classy?) In the end, I think gift cards are here to stay. I would still much rather have a gift card than a sweater that doesn’t fit. We just have to accept that there is going to be some waste in the process, like all that wrapping paper and ribbon.

My Money Blog has partnered with CardRatings and Credit-Land for selected credit cards, and may receive a commission from card issuers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.



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Comments

  1. A sweater that doesn’t fit with a gift receipt could be used just like a gift card if you get to the store in time to exchange it. I’ve often thought about buying something I thought someone would like and just giving them the opportunity to exchange it with no guilt (gift receipt).

  2. Tracy K in Illinois says:

    Don’t let those gift cards go to waste. Either re-gift, exhange on CardCash or use the card to buy a gift for someone else. These statistics are bonkers! I try to never let a gift card go to waste.

  3. Aren’t they supposed to turn the funds to the State’s unclaimed funds after certain period of time or does it only apply to the funds attached to a name?

  4. Does the store/business get to keep that money? Is it not treated like abandoned bank accounts where the value ultimately revert to the state?

    $100M? Absolutely amazing. A profit that a billion dollar company would be happy with.

    On a personal note, I’ve recently dug through my dresser drawers to find cards that I’ve ignored. Cash cards? I just apply to my cable bill, so I can burn off the exact amount. CVS and Starbucks, I put in my wallet for the next visits. Can’t let these get lost.

  5. Italiangirl says:

    I California they never expire. Leave them to your grandkids!

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