Editorial Policy

My gift card audit: I had almost $80 lying around

Kristin McGrath

November 14, 2013

Short on cash? After you’re done digging around in couch cushions and winter coat pockets, look to the gift cards hiding in the back of your wallet. You may have more money on those cards than you think.

Realizing my wallet was thick with not-quite-used-up gift cards, I decided to do an audit. So I sat down at the computer and looked up how much I had on each card. Across the eight gift cards I’d received in the past year or so, I had a total of $79.

Here’s the buried treasure I found:

  • $15 on a local movie theater gift card
  • $20 on a gift card to an Italian restaurant chain
  • $10 on a Target gift card
  • Between $3 and $12 each on a smattering of American Express and Vanilla Visa gift cards

My situation illustrates precisely why retailers, issuers and restaurants love these things. Thoughtful people buy gift cards as holiday gifts for the impossible-to-buy-for people on their gift lists. The recipients use some of the funds on the gift cards and forget about the rest. About $2 billion worth of gift card funds (about 2 percent of the money loaded onto them) went unused in 2011, according to research firm TowerGroup. That was actually down from the amount wasted in 2007, when $3.5 billion went unused. The Great Recession, it would seem, made consumers more likely to squeeze every last dollar out of their gift cards.

My gift card waste (the industry calls it “breakage”) was at about 17 percent of the original amount loaded across all my cards. How did that happen? In some cases (as with the movie theater card and the restaurant card), I used both cards once, intending to use of the rest later, but never did. As for the rest, it was a combination of tip tolerance (a frustrating practice that causes some of the funds to be “frozen” when you use the card at a restaurant and later refunded) and my own forgetfulness.

Since discovering this modest windfall, I’ve tried to use it wisely — and not as an excuse for extra spending. I took my boyfriend to see a movie we’d been eagerly awaiting for months and had already worked into our “fun” budget (it was a matinee, so the gift card covered both tickets). We will also be using the restaurant gift card for our scheduled weekly meal out this week. As for the remaining cards, I used them all for a purchase I’d been delaying for a couple months: a vacuum cleaner to replace my broken one. The cashier looked a little impatient, but I ran all six cards through, reducing a $70 purchase to just under $30.

If you suspect you have some funds languishing on gift cards, keep these things in mind:

  • Your funds are safer than they used to be. The CARD Act of 2009 limits inactivity fees that can be charged on gift card funds (such fees can kick in only after the card has gone unused for 12 months) and prevents funds from expiring within five years of activation.
  • You can sell the cards for cash. Personal finance blog Common Sense Millennial has some instructions for leveraging unwanted gift cards into cash or even discounted gift cards at the stores and websites you actually shop at. There are several gift card swap sites that let you do this.

Forgetting about my gift cards gave me a nice surprise at a time of year when money gets tight. Still, I’m planning to do a better job of keeping track in the future so that I can strategically let funds pile up and for larger purchases — and the occasional splurge.