Study Discovers Value in Expired Gift Cards

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State governments collect unused gift cards as unclaimed property, creating both an opportunity and a problem for consumers.

Social Gift Card Exchange

In Illinois, gift cards never stop giving. Even when gift cards expire, consumers can recover their money from the state.

According to TowerGroup, a significant amount of money is wasted on unused gift cards each year. There was a combined $16 billion in unused gift cards in 2006 and 2007 - which means a significant portion of the gift cards that make up this huge amount of money are due to expire this year. Some consumers with expired gift cards may be out of luck, but consumers in states that collect gift cards as unclaimed property may still have an option to redeem the value of their expired gift cards. released a study that examines the policies on collecting gift cards as unclaimed property in the 10 largest states in the U.S, according to population. The study found that 6 of the 10 states in the study collect unused gift cards, including expired gift cards, as unclaimed property. This is good news for consumers because it means they can get the value of their gift card back by making a claim through the state even after the merchant will no longer accept it. Illinois State Treasurer Alexi Giannoulias said, “In Illinois, gift cards never stop giving. Even when gift cards expire, consumers can recover their money from the state.”

However, the study found another major implication of these states’ unclaimed property policies that was not nearly as positive. Of the six states that collect gift cards as unclaimed property, five of them collect gift cards before they expire. This means that a consumer could be denied the use of an unexpired gift card because the merchant has already turned the gift card over to the state. The unclaimed property laws in Texas, for example, require that merchants report gift cards as unclaimed property after three years of inactivity even if the card has not expired.

In the event that the merchant does not accept a gift card that they have already reported as unclaimed property, the consumer is forced into a complicated claims process for a gift card that they should have been able to easily use. The study found that the claims process in this case is particularly difficult due to the nature of gift cards. Generally, there is very little information associated with a gift card and the person who bought - and therefore owns - the card is not the person making the claim.

These states have essentially taken an unclaimed property policy that usually applies to accounts with clear ownership and retrofitted it to gift cards, which frequently change ownership and require little information to buy or use. The study discovered the following difficulties with the claims process for gift cards:

  •     The gift card number is generally not enough to claim a card, unless it was the only information reported.
  •     Since the person who bought the gift card is not the person trying to claim it, the ‘owner’ generally needs to sign an affidavit in order to legally turn over the property to the gift card recipient.
  •     The lack of information makes it difficult, or impossible, for merchants to give the cardholder notice before they turn it over to the state.
  •     It was unclear when talking to the Unclaimed Funds representatives from some states exactly how the customer would know to go to the state to make a claim in the first place.

Due to the difficulty in claiming a gift card through the claims process, it is recommended that consumers use their gift cards quickly or list them in a gift card exchange to trade them for cash or a gift card that they will use.

About is the leading credit card and gift card marketplace in the U.S. It has revolutionized the way consumers search for, compare, and apply for financial products, including gift cards, credit card offers, charge cards, and prepaid cards. also offers the first Social Gift Card Exchange, which provides a platform for users to buy and sell gift cards directly with friends, neighbors, colleagues, and trusted companies at discounted prices. is parented by Evolution Finance, which was recently named one of the five hottest start-up companies in the mid-Atlantic region.

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Kimberly Cole