Gift Card Mania & Return Policies

Gift Card Mania & Return Policies

The holiday season often brings a surge of gift card purchases and merchandise returns, both of which significantly impact retailers and consumers. 

Gift cards remain a favorite choice for holiday gifting.  In 2024, Americans spent nearly $30 billion on gift cards, making them the second most popular gift after clothing. 

Despite their popularity, gift cards present certain challenges.  Retailers love it when consumers buy gift cards for several reasons. 

A consumer reports survey found that 25% (called Breakage in the industry) of gift card recipients still had unspent cards a year after receiving them!   Also, many consumers spend more than the card’s value when redeeming them.  Bankrate.com said the average American has $240 of unused gift cards.

Other reasons Gift Cards don’t get used include:

  1. The Gift Card gets misplaced, and the recipient is not comfortable going back to the person who gifted the card.
  2. The Gift Card recipient didn’t register the card online.
  3. The Gift Card recipient didn’t know the gift cards can be sold online.
  4. The Gift Card recipient isn’t a fan of the retail store where the card was purchased.

Last week I stopped to see a client and friend who co-owns a salon to wish him a Happy New Year.  He asked about my next column topic, and I told him it was on gift cards.  I knew I had a good subject after his rant that he had just received 2 more and now has 6 unused $50 gift certificates from retail stores where he doesn’t shop.  

Some of my solutions to prevent lost gift cards include:

  1. Set Up Online Account to Register the Card: Most card websites will allow you to register the gift card for credit via their online account by inputting your card and pin#. 
  2. Set Up Account Password: This prevents scammers from stealing your online gift card money.
  3. Selling Unwanted Cards Online: I suggest avoiding general websites like Craigslist and using www.GCX.Raise.com This secured site makes it easy to sell Gift Cards from various brands and retailers for cash as well as buying discounted Gift Cards if needed.  Another site for a 2nd opinion is www.CardCash.com.
  4. 5-year Rule:  Under Federal law, gift cards, though not returnable, are protected from expiring for 5 years.  Some states have additional protections.

Have you noticed how difficult it’s been to return items this holiday season? 

The National Retail Federation estimated that 17% of holiday purchases would be returned in 2024, amounting to approximately $890 billion.

As per CBS, holiday returns surged 36% higher than last year, prompting retailers to tighten policies with stricter deadlines and new fees!  Most retailers spend about $32 processing and reselling every $100 item returned online. 

This is why many retailers charge fees such as a “restocking” fee.  Companies such as H&M, Zara and American Eagle have introduced fees for returns to offset their 32% processing costs.  Many retailers will waive the fee if you return the item by mail.

Retailers are also working to prevent returns through technology using virtual try-on features, size prediction algorithms and enhanced product descriptions.

See below for a specific retailer list of return deadlines:

  1. Apple: January 8th (sorry this was written after that date)
  2. Best Buy: January 14th
  3. Target: January 24th
  4. Amazon: January 31st
  5. Walmart: January 31st

Perhaps it’s time to treat yourself with your store card!

Happy New Year!