When do they expire and what happens to the funds if they are not used – Telemundo New York (47)

Gift tags to put inside Christmas stockings, as long as you don't put them in a drawer and forget about them after the holiday season.

Americans were expected to spend nearly $30 billion on gift cards this holiday season, according to the National Retail Federation. Restaurant gift cards are the most popular, accounting for a third of those sales.

Most of these gift cards will be used. Paytronix, a platform that tracks restaurant gift card sales, said about 70% of gift cards are used within six months.

But many cards (worth tens of billions of dollars) end up forgotten or unused. That's when life with a gift card gets a little more complicated, as expiration dates or inactivity fees can vary by state.

Here's what you should know about gift cards:

Gift cards, common but missing

After clothing, gift cards will be the most popular gift this holiday season. Nearly half of Americans plan to donate it, according to the National Retail Federation.

But many cards will remain unused.

If you still have to do your Christmas shopping, authorities warn that criminals are taking advantage of these dates to commit fraud. To see more from Telemundo, visit https://www.nbc.com/networks/telemundo

Gift cards get lost or forgotten, or recipients keep them for a special occasion. A July survey by consumer finance company Bankrate found that 47% of American adults had at least one unspent gift card or coupon. The average value of unused gift cards is $187 per person, for a total of $23 billion.

When do gift cards expire?

Under a federal law that took effect in 2010, a gift card cannot expire for five years from the time it was purchased or from the last time someone added money to it. Some state laws require a longer period. In New York, for example, any gift cards purchased after December 10, 2022 cannot expire for nine years.

Different state laws are one reason many stores have stopped using expiration dates altogether, said Ted Rossman, senior industry analyst at Bankrate.

While gift cards can take years to expire, experts say it's still wise to spend them quickly. Some cards, especially general Visa or MasterCard cash cards, will begin to accrue inactivity fees if they haven't been used for a year, reducing their value. Inflation also causes cards to lose value over time. If a retail store closes or goes bankrupt, the gift card may become worthless.

Maybe you could consider using your cards on National Use Your Gift Card Day, a five-year-old day created by a public relations executive; History is now supported by many retail stores. The next one is January 20, 2024.

How to sell a gift card

If you have a gift card you don't want, one option is to sell it on a site like CardCash or Raise. Resale sites won't give you the face value of their cards, but will typically give you between 70 and 80 cents on the dollar, Rossman said.

What happens to funds from a gift card that are not used?

What happens to the money when the gift card is not used? It depends on the state in which the retailer is established.

When you purchase a gift card, the retailer can use those funds immediately. But it also becomes a burden; The retailer must plan for the possibility of redeeming the gift card.

Every year, large companies calculate the “gap,” which is the amount of liability on gift cards they believe will not be redeemed based on historical averages. For some companies, like Seattle-based Starbucks, the differences are a huge source of profit. Starbucks reported differential income of $212 million in 2022.

But in at least 19 states (including Delaware, where several large companies have incorporated) retailers must work with state unclaimed property programs to refund consumers for unspent gift cards. Money not recovered by individual consumers is spent on public service initiatives; From the point of view of states, they should not go to companies because they did not provide a service to earn them.

Claim your money

All 50 states and the District of Columbia have unclaimed property programs.

Combined, these companies return about $3 billion to consumers annually, said Misha Werchkul, executive director of the Washington State Budget and Policy Center.

It can be difficult to find holders of unspent gift cards, but the growing number of digital cards bearing the recipient's name is helping, Wierschkul said. The unclaimed property offices jointly manage the site MissingMoney.comwhere consumers can search by name for any unclaimed property owed to them, including cash from gift cards.