The secret life of gift cards: Here's what happens to the billions that go unspent each year
apnews.com
Gift cards make great stocking stuffers — just as long as you don’t stuff them in a drawer and forget about them after the holidays.
Americans are expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, making up one-third of those sales.
Most of those gift cards will be redeemed. Paytronix, which tracks restaurant gift card sales, says around 70% of gift cards are used within six months.
But many cards — tens of billions of dollars’ worth — wind up forgotten or otherwise unused. That’s when the life of a gift card gets more complicated, with expiration dates or inactivity fees that can vary by state.
Gift cards are terrible gifts and I wish people would stop giving them. Just give them straight cash money to spend on whatever they want, an item they actually could use, or even better, nothing at all if they don't actually need it.
I disagree, but only to the extent that you know the person well enough to know they'll use it or they explicitly ask you for it. To me, gift cards are a way to alleviate the paralysis of choice and guilt for spending money in certain ways. It's like "I know you couldn't mentally justify spending a $100 bill on a high quality set of sheets, so I'm giving you money specifically earmarked for that purpose."
It's also sometimes handy if you want to give someone money for everyday needs and know they'd feel guilty or embarrassed about receiving money directly. A gift card for a store you know they go to a lot can be a fairly tasteful gift. Again, though, it's only worth it if you know they'll actually use it.
And don't get those prepaid general purpose gift cards, those things are straight up scams.
That's what I never understood about the taboo of cash as gifts. Whats weirder to me is it's pretty common to get straight cash money as a gift for graduating from highschool, but not for christmas or birthdays?
I personally dislike feeling the obligation to buy something from a specific store because of the gift cards. Getting cash (or not spending money on gifts) gives me more flexibility. And if I ever need the cash I don't feel obligated to lose money in a transaction having to sell some item off. Whether it be the item I bought with the gift card, or some other item I bought so I can keep that other item.
I second this. A 100 dollar bill just gets saved in my safe. However, if I'm given something like an Amazon gift card, I have zero reason to not spend it.
Granted, the things I would want are very particular and normally on the expensive side, so I would rather have people give me a bit of money to go towards said things.
It's an interest-free loan to a giant corporation in return for obliging someone to keep it somewhere safe, and remember to take it with them when they want to spend it, with no choice as to where to spend it, and a high chance that they never will get around to spending it.
Cash is better in every conceivable way.
I explicitly ask for gift cards, because the last thing I need cluttering up my house are random gifts that people got me. I've gotten to the point where I don't really care for surprise gifts, and I feel like a jerk telling people exactly what to get me. So I just ask for gift cards, and I use the money to buy my own gifts.
My wife and I don't really buy each other gifts anymore. We just buy ourselves something we want and say, "This is my Christmas gift from you!" Repeat for birthdays, etc. Not having any expectations of buying/exchanging gifts is liberating for us.
Same, I'd rather have people help me subsidize big purchases with gift cards than buy me stuff I don't need or want. The in-laws especially hate giving gift cards so for years the wife and I tell them we just don't want anything for the holidays. This year they finally caved and sent us some gift cards. I'd rather have to pay $50 less for an expensive tool/toy than have $50 worth of even more junk cluttering up my house
This is what I prefer. Instead of getting a gift card and feeling obliged to buy something from X retailer. Sometimes I just don't want to buy something from them. Whether it's cheaper elsewhere, or I just don't trust them for that item so I either have to pay more just to use the gift card, or risk getting a knockoff.
With straight cash money I can spend it whenever I want, on whatever I want, wherever I want.
That's why I'd rather cash or nothing.
I agree. I always try to give cash over gift cards. Much more flexible and does not expire.
Gift cards are a hassle because you have to keep careful track of them and be sure you have them when going to that exact business. Cash just goes with your cash.
MY COKE DEALER DOESN’T ACCEPT MACY’S GIFT CARDS, MOM
It's like the plot of Office Space, but in reverse. Corporations steal pennies from consumers. The only difference is that it's legal when they steal from you.
This sounds like the plot to that superman movie
Holy shit the US has some consumer protection we don't have over here (at least in the UK)
A legally enforceable 5y minimum expiration for a gift card is a fucking great idea.
In Canada they never expire unless the store goes out of business. There’s a few exceptions for things that are services rather than freely spent balance but yeah, to me it seems unfair that they would be able to just absorb that money.
Uhm, don't have a concrete source here but AFAIK in the EU gift cards that have been bought by paying money into them are not allowed to expire, and I would have thought the UK has similar laws.
Coupons from magazines are not something anyone spent money on so they can have expiry dates.
Oh those poor poor capitalists.
If corporations are people then accounting rules are persecution!
I'm so glad I live in California where they do not expire and you can just exchange them for cash if they are over $5 or $10 (it's one or the other).
Where can you exchange one? I'm in California too and I just received one and haven't had one in years.
Usually the place the card is for.
Oh it's just a MC. Nevermind.
You just take them to the store the gift card is for. OP has it wrong though, it has to be under $10 not over $10 to get the cash value.
You have that flipped, it’s cash out if they’re $10 or under not over.
gift cards and virtual app balances allow companies to operate as unregulated banks, and take out massive loans using their unspent balance as collateral. It's a clever way to avoid the typical regulations in holding client money
Never thought about it that way and didn't know they could do that.
I assume it's not literal. Just kind of functions that way in practice.
For Starbucks I believe it is literal that they operate more as a bank than a coffee chain
They should automatically refund to money if not spent in 5 years or so.
Gift cards would cease to exist overnight if that was a requirement.
They hope you forget, it's free money.
But if every dollar had to be worth a dollar, there would be no space to squeez in operating costs - issuance, accounting, all that jazz.
Sure, they'll bring in a couple more customers maybe, sure, you can make some money on the interest in the meantime, but it just wouldn't be worth it IMO.
"Gift cards would cease to exist overnight if that was a requirement."
Okay 👍
Obviously it's a hyperbole.
Please share your argument or don't waste the bandwidth of your lemmy server.
There's always going to be free money involved.
For every $50 gift card there's still that $1.87 you have remaining from your not exactly $50 purchase that's too much of a hassle to ever use again.
Some places like Costco, Dunkin, etc let you merge balances so you can actually use them. Ones that don't support it via the website/app usually will do it for you in store or via support channels.
It's apparently not known that we have made some improvements to the way companies deal with gift cards and store balances. This is thanks to that little appreciated consumer protection bureau. It used to be that they could take monthly fees starting immediately and could have balances expire after a year or any arbitrary block of time.
I'm in Texas. I've been cashier in multiple roles, between my entry-level stuff and sometimes having to fill in. I don't know about the laws elsewhere. Every payment system I've ever used had a way that you could split payment, and usually if it was a debit card of any sort, it would just take whatever was left in the account and you'd have a remaining balance, payable any other way. That said, if anyone is ever thinking about getting me a gift card, I just tell them to give me the cash equivalent, it's more useful than cards.
I wasn't even going to worry about covering that angle. These days Costco, sheetz, etc all track your balance on your account so for most businesses people would use most often this old time issue with having a few pennies left isn't actually a problem anymore.
As for the laws, the cfpb is a federal agency. I remember when that was created and I remember what shady shit businesses would play with gift cards to pad their bottom line.
Refund automatically to who? Most gift card sales are fairly anonymous, and I much prefer that than having to give details out.
The money laundering risk would be pretty high for them to do that
How so? People laundering money aren't going to wait that long for clean funds ignoring the obvious issues with then attempting to refund cash to fake names and addresses because if the so called launderers used their real info it would be too easy to prosecute them.
Long story short, this would be the most inefficient way to clean cash.
I think it depends on where the card is from. I love an Amazon gift card because I can always find something there, but my aunt had someone buy her an Aritzia gift card, which is a store for very young women mostly and almost all the sizes are extra small, and she's 85. She calls it "the store for girls who like to show off their.behinds".
She ended up taking me shopping with the card, but I'm 49 so all I found were leggings, and that's useful but it's really dumb to buy someone something that's so age focused.
Why buy gift card ? just gift cash.
I'm with you... but, sometimes you can get gift cards cheaper than what they are worth. Like, pay $40 for a $50 gift card to Lowes. If you know a person likes a place it's a way to get more bang for your buck.
Reward points if using a credit card to purchase.
Also, some stores in the states at least, like Kroger, give their own points for fuel.
Also cash feels much less personal when giving a gift.
"I know you like X, so here's a gift card to experience more of X" feels more thoughtful than "here's some green cotton, do whatever".
I'd much rather just get the green cotton
Except most people give gift cards to places I don't actually shop at.
This is the one.
Grandma sends you a $150 gift card to Brookshires but you live on the West Coast, a few thousand miles from the nearest.
I've gotten 3 Starbucks gift cards. I get that it's really popular but I wish it wasn't people's go-to gift card.
I bet you can name 3 people who don't give a fuck about you, but felt guilty enough to feel the need to line a billionaire's pockets smh
Just tell them not to bother