Gift Card, Sure, but for Whom?
Got a gift card for the holidays? Better use it or lose it to a company that could double its money if the card isn't used within a certain period of time. Earlier this year, says Consumer Reports, the TowerGroup research firm in Needham, Mass., estimated the value of unused gift cards in the U.S. at $8 billion for 2006.
Best Buy alone said in its fiscal 2006 annual report that it posted a $43 million gain from gift cards that were unlikely to be used. And The New York Post estimates that 10 percent of gift cards purchased during the 2007 holiday season will go unused, bringing in $3.5 billion to the coffers of companies that sell them.
A survey of 1,003 adults conducted in October by the Consumer Reports National Research Center found that 27 percent of those who received gift cards during the 2006 holiday season had not used one or more of them nearly a year later because they forgot about them, lost them or the cards had expired.
Gift cards come in two flavors: retailer-issued cards like those from Best Buy or iTunes and the bank-issued variety bearing a credit-card logo. The latter typically add on service fees ranging from $2-$10, Consumer Reports says, and may add other fees as well.
The state of Illinois, for one, has taken note--and action. As of Jan. 1, 2008, the expiration date on gift cards must be 5 years from date of purchase and no fees can be charged that will cut into the value of the gift. The Illinois treasury is holding $5 million in unused gift card balances for Illinois residents. If part of that fortune could be yours, check out the Illinois State Treasurer website.
For a full list of gift card legislation, state by state, visit the National Council of State Legislatures.--Rebecca Day