Gift Cards, Keep on Giving!

Prepaid gift cards have been around for over 20 years.  Originally, there were only physical cards available.  Now that we are in the Internet age, retailers offer digital and physical card options. 

There are 2 types of gift cards available:

1. Open Loop: Open Loop gift cards usually go through credit card companies like Visa or MasterCard.  These cards allow the cardholder to purchase various goods from numerous stores that accept that particular credit card. 
2. Closed Loop: Closed Loop cards usually are issued by a single retailer or restaurant and can only be used at that store.

Fraudsters usually attack closed-loop cards, which are easier to sell, and because Open Loop cards often have higher levels of security because they are linked to credit card companies. 

Before getting into some suggestions to maximize unused cards, the following are statistics from the National Retail Foundation and bankrate.com:

1. Americans spent $29.3 billion on gift cards this holiday season.
2. Millennials make up 37% of gift card buyers.
3. Almost 50% of all 2023 gift cards were purchased in December.
4. 17% of Americans surveyed said they would want to receive a gift card for the holidays.
5. 51% of U.S. adults forget to redeem their gift cards.
6. Gift card scams are by far the most common type of payment fraud in the United States.
7. The USA accounts for over 50% of the world’s gift cards.
8. By 2025 the physical gift card market is projected to grow by 9%, and digital gift cards are expected to grow at an annual rate of 26%. 
9. 56% of millennials have unused gift cards with an average value of $139.
10. The three biggest issuers of gift cards are Amazon, Japan’s Rakuten, and China’s Alibaba.

Although it hasn’t happened in years, I remember receiving a gift card, then forgetting about it, and by the time I remembered, I couldn’t find the card. 

The following are tips on the usage of your gift cards while they are fresh in your mind from the holiday season:

1. Keep the card in your wallet or purse that you use every day.
2. If you received an Amazon card, go onto the Amazon website, and enter the scratch-off code on the back of the card (in the gift code section) so it gets stored on Amazon for future use.  It will show up automatically in your cart the next time you make an Amazon purchase. 
3. Under the Federal Credit Card Act, an “Open Loop” card should be valid for up to 5 years.
4. Consider using the card within 12 months as some cards charge inactivity fees after one year.
5. Check your card to see if it can be loaded into Venmo or a “cash app.”
6. Some gift cards can be directly transferred to your bank account.
7. Unwanted gift cards can be sold or swapped using several websites.
8. Pennyhoarder.com lists the top 5 ranked websites to sell or swap cards as cardcash.com (they accept 1300 retailers, grocers, restaurants), clipkard.com (they accept physical cards from 100 retailers including fast food and department stores), gameflip.com (for gamers), giftcash.com (you can receive up to 93% of its value and get a quote before selling), and raise.com (they take a 15% fee).

Whatever you decide to do, do something, and enjoy your gift card that keeps on giving!