Years ago, a friend in need of money sold me a $100 Nordstrom gift card. I wish I knew where the hell I put it.
Gift cards are a popular holiday solution, especially recently, as supply chain disruptions and shipping delays have made gift shopping more difficult. Most gift cards are spent within a year, but billions of dollars go unused and about 1-2% of gift card dollars typically go unused, according to Amy Dunckelmann, vice president of research operations for Mercator. Advisory Group, a global payments consultant.
This year, my New Year’s resolution is to find and deploy every gift card hiding in our household by January 15, which is this year’s National Use Your Gift Card Day. For help, I turned to two gift card experts who offered suggestions on how to keep track of the cards and how best to use them.
Make a plan for the cards you won’t be using
Gift cards are of two types: those that you will use and those that you will not use. If a gift card isn’t right for you, ask yourself which might be right for you, says Tracy Tilson, founder of UseYourGiftCard.com and creator of National Use Your Gift Card Day.
You can give it back to a friend or neighbor, donate it to charity, or give it to a first responder as a thank you for their hard work during the pandemic, Tilson suggests.
“It’s a good way to build goodwill if you’re not going to use them,” Tilson says.
You can sell the card to someone you know or trade it for one of their unwanted cards. Gift cards can be sold or redeemed online, but scams abound. Buyers may ask you to read card numbers to “ensure the card is legit” and walk away with the value of the card once you do. Or the card you get in a trade may be fake or already used. Avoid private sales to strangers, like those on Craigslist or Facebook. If you want to use an online site, make sure it has a money-back guarantee after transaction.
Set reminders for the cards you want to use
If you plan to use a card, use your phone and a calendar to help you keep track, says Shelley Hunter, spokesperson for GiftCards.com, an online gift card provider. Hunter keeps a running list of her cards on her phone and notes on her calendar when she plans to use one.
“Saturday I’m probably going out to lunch with my boys, so I’m going to put on the calendar, ‘Lunch with the boys. Use the Panera gift card,'” says Hunter.
Even if you don’t have a specific plan for a card, consider putting a “use by” date on your calendar so you don’t forget, Tilson says.
Hunter also recommends treating cards like cash. If you got a $20 bill as a gift, you’d probably put it in your wallet right away, Hunter notes. Consider doing the same with gift cards you plan to use.
“I put them next to the debit or credit card I use most often,” she says.
Tilson agrees. If she puts gift cards somewhere else in her wallet or purse, “I forget about them.”
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Keep in mind the expiration rules
The time you have to use your gift cards may depend on where you live and the type of card.
Under the federal Credit Card Accountability and Disclosure Act of 2009, gift cards cannot expire for five years, although issuers may charge an inactivity fee if the card has not been used within 12 months.
Some states have additional rules. Where I live in California, store gift certificates and gift cards cannot expire. Inactivity fees are generally prohibited and balances below $10 can be redeemed for cash. The law does not apply to general purpose gift cards, however, if the expiration date is printed on the card. (General purpose cards include gift cards issued by Visa, Mastercard, Discover and American Express which can be used anywhere these brands are accepted.)
You can find other states’ rules by searching for “gift card” on the National Conference of State Legislatures website.
In general, however, the faster you use your cards, the better. You are less likely to forget them and more likely to appreciate the value the giver wanted you to have.
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About the Author: Liz Weston is a columnist at NerdWallet. She is a Certified Financial Planner and author of five books on money, including “Your Credit Score.”