What to Do With Unused Gift Cards?

Unused gift cards represent a significant amount of overlooked financial value. Many people receive gift cards they do not intend to use, allowing these funds to sit idle. In the United States alone, approximately $21 billion worth of gift cards remain unspent annually, with about 43% of Americans possessing at least one unused card. This substantial pool of unredeemed value highlights an opportunity for individuals to recover or reallocate funds. Effectively managing these cards can unlock financial benefit.

Determining Card Value and Terms

The initial step in managing an unused gift card involves accurately determining its remaining value and understanding any associated terms. Most gift cards provide a toll-free number on the back for balance inquiries, or direct you to a website where you can enter the 16-digit card number and a security code to check the balance online. For some digital cards, the card number and PIN might be located under a barcode.

Beyond the balance, it is important to review the terms and conditions, which are often printed on the card or its packaging, or available on the issuer’s website. Federal law mandates that gift cards cannot expire in less than five years from the date of issuance. This law also stipulates that dormancy or inactivity fees generally cannot be charged unless the card has been inactive for at least one year, and such fees must be clearly disclosed. Some states may offer additional protections, extending validity periods or prohibiting expiration dates altogether.

Understanding these terms helps in planning how to use the card effectively and avoid potential loss of value due to fees or expiration. If a card has a small remaining balance, consider using it towards a larger purchase and covering the difference with another payment method like cash or a credit card. This strategy ensures full utilization of the card’s value.

Directly Using Your Gift Card

The most straightforward approach for utilizing a gift card involves its direct redemption for goods or services. For in-store purchases, the process is similar to using a debit or credit card, typically requiring a swipe or insertion of the physical card at the point of sale. Many gift cards can also be redeemed for online purchases by entering the card number and PIN during the checkout process.

Gift cards can often be combined with other payment methods when a purchase exceeds the card’s value. For instance, if a gift card has a $25 balance and an item costs $40, the cardholder can use the gift card for the initial $25 and pay the remaining $15 with cash or a credit card. This flexibility ensures partial balances are fully leveraged. Beyond traditional retail, many gift cards are applicable for services or experiences, such as dining at restaurants, spa treatments, or entertainment venues, depending on the card’s issuer.

Converting Unwanted Gift Cards

When direct use of a gift card is not desired, several options exist for converting its value into cash or a more suitable form. Online gift card marketplaces, such as CardCash and Raise, facilitate the sale of unwanted gift cards to other consumers. On these platforms, sellers typically receive a percentage of the card’s face value, often ranging from 70% to 93%, with higher demand brands fetching better rates. Payments are commonly issued via check, direct deposit (ACH), or PayPal, though processing times can vary.

Another method involves gift card exchange kiosks, which offer immediate cash for gift cards. Kiosks scan the card and provide a cash offer, usually between 60% and 85% of the card’s value. While convenient for instant payouts, the percentage received is generally lower compared to online marketplaces. Selling directly to friends, family, or through online classifieds can yield a higher percentage closer to face value, but requires caution due to potential security risks.

In limited scenarios, some retailers may allow converting a gift card into store credit or, less commonly, cash if the original purchase was made with cash and a receipt is available. Most stores will refund purchases made with a gift card back onto a gift card or issue store credit rather than cash. Certain states may have laws requiring cash redemption for gift card balances below a specific, minimal threshold, such as under $10.

Donating Gift Cards

Donating unwanted gift cards provides a charitable alternative to direct use or conversion. Many non-profit organizations readily accept gift cards as donations, which can then be used to purchase supplies, support programs, or provide direct assistance to those in need. Organizations assisting families, animal shelters, or educational initiatives are often good candidates for such contributions.

For tax purposes, a donation of a gift card to a qualified 501(c)(3) charitable organization can be tax-deductible for individuals who itemize their deductions. The deductible amount is generally the fair market value of the gift card, which is typically its face value. Donors should ensure they receive proper acknowledgment from the charity for their records, especially for donations exceeding $250. Alternatively, a gift card can be used to purchase specific goods, such as school supplies, toys, or food, which are then donated to a charity.