The $1 Billion Tragedy: Unredeemed Gift Cards In America

Gift cards can be a truly great gift…to the retail sector. While only 1% of gift cards go unredeemed, with about $116 billion in gift card sales annually, that’s more than $1 billion that we’re just leaving in a drawer until retailers take it back.

When you activate or re-load a gift card, the clock starts ticking. Thanks to 2009’s CARD Act, you have at least five years to spend a gift card after that point. Customers aren’t entitled to a full refund in the event that a company goes out of business. The smaller a company is, the better the odds are that they will disappear: about half of all small businesses close in their first five years.

Size is no guarantee that a company’s doors will stay open, of course: just ask everyone who was stuck with a Borders or KB Toys gift card.

$1 billion in gift cards go unredeemed [Marketwatch]

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  1. theoriginalcatastrophegirl says:

    there was also an issue when KayBee Toys became K.B. Toys. I worked there at the time (Melville sold them to Consolidated) but didn’t want to honor the old gift certificates. if i recall correctly, they ended up taking them after a few months of arguing about it, but it really hurt the store’s reputation with long time customers

  2. C0Y0TY says:

    Some states like Connecticut mandate cards cannot expire, so companies must honor the cards no matter how long the owners wait to use them.