ATLANTA — The holiday season has come and gone, but if you're a lucky one with some gift cards, there's still shopping to be done!
But are there limits in how long you have to spend such cards?
THE QUESTION
Do gift cards expire?
THE SOURCES
THE ANSWER
Gift cards can expire, but technically you have at least one year to use them penalty free---and up to five years guaranteed.
WHAT WE FOUND
"About half of us are sitting on unused gift card value," Ted Rossman, senior industry analyst at CreditCards.com, told the Verify team. "It actually works out to an average of about $175 per person, which is $21 billion across the country."
So if you're one to forget about a gift card at the bottom of your purse or have found one in a dresser drawer, you're not alone. According to a recent poll released by the group, 47% of people have at least one unused gift card or store credit waiting to be spent, which could leave some questions about how long a gift card is good for.
Turns out, federal law sets some standards to protect consumers. Under the Credit Card Act of 2009, a gift card cannot expire for at least five years from the date the card was purchased or the last date funds were reloaded. According to the Federal Trade Commission, if the expiration date listed on the card is earlier than these dates, the money can be transferred to a replacement card at no cost. Meanwhile, inactivity fees can be charged only after a card hasn't been used for at least one year.
Rossman said that's an important point to keep in mind.
"That's a good tip that can eat into the value pretty quickly," he said. "That's one of the reasons to use them sooner rather than later."
Verify viewer Jenni also wanted to know what happens to the money if a gift card is not spent? Georgia law is specific with that answer, stating "a gift certificate or a credit memo issued in the ordinary course of an issuer's business which remains unclaimed by the owner for more than five years after becoming payable or distributable is presumed abandoned."
According to the law, the retailer is supposed to send the purchase amount to the state's unclaimed property division where the money is held for the owner. You can search for any unclaimed property you may have in the Georgia Department of Revenue database.
So yes, it's true gift cards can expire, but federal protection ensure consumers have at least one year to use their gift cards penalty free and up to five years guaranteed. But given inflation and the risk of a business closing, Rossman said it's best to spend gift cards you have sooner rather than later.
"We see a sizable number of people who've either lost a gift card or maybe the store went out of business before they had a chance to use it," Rossman said. "I tend to think out of sight, out of mind. So, it's important to find these and come up with a plan."
Looking for other ways to spend your unused gift cards? According to CreditCards.com, regifting is always an option and can help you save on presents for other people. You can also advantage of gift card resale sites like Raise.com or eBay. Experts say such sites can pay out up to 92% of the card’s value in cash.
Learn more here.