Why $750 Million In Gift Cards Will Go Unspent In 2014
Dec 17, 2014
While gift card sales are breaking records every year, so is the amount of unspent balances. Consumers in 2014 are on track to leave three quarters of a billion dollars lingering on their gift cards by year’s end.
Gift Card Balances
Gift cards are big business, and so is the money on them that goes left unspent. $750 million is expected to go unspent in 2014. While $750 million is a huge chunk of unspent change, the number is actually down from last year, when consumers left more than $1 billion on unused gift card balances. Expiration dates on gift cards gained national attention in the past, leading the Credit Card Accountability, Responsibility and Disclosure Act of 2009 to give them a five year life span after they are issued. Unclaimed gift card balances were given added protection, but consumers are still letting hundreds of millions of dollars linger on their cards.
The five year expiration date extension was designed to give consumers more power and flexibility with their gift cards, but it seems that it may also encourage people to delay the use of their cards, or forget about them. With more cards being given as gifts than ever before, the unspent balance amounts are increasing, as well.
Here are the facts:
- Gift card sales reached an all time high of $124 billion this year, a $6 billion increase over last year alone.
- Gift card sales have increased by 55 percent since 2007.
- From 2005 to 2011, more than $41 billion in gift cards went unspent.
- In the six years since 2008, that number is closer to $45 billion.
Retailers don’t exactly get “free money” from unspent balances, however. The Securities and Exchange Commission only allows companies to take unspent gift card balances as revenue when they can reasonably say they won’t be redeemed. The law puts at least a five year time limit on that.
