It’s estimated that across the United States, Americans have $21 billion loaded onto gift cards, just waiting for the right time to spend them as their value decreases.
In a survey of 1,200 Americans conducted in December 2022, Credit Summit — a financial consultant company — found that while 91% of Americans enjoy receiving these preloaded cards for gifts, about two-thirds of Americans keep them tucked away and unused.
More than 76% of them hold onto the gift cards saying they “save them for something special,” “wait until (they) need something from that particular store,” or they “don’t regularly shop at that particular retailer,” per the survey.
When gift cards go unused, the likelihood that it won’t be used increases more and more, per The Hustle. After a year, 80% of gift cards go unused entirely.
And in waiting to use it, 57% said they didn’t even use the gift card because they lost it, it was damaged, or they kept it for so long that it was no longer valid.
Resulting in billions of dollars sitting in drawers, wallets and shelves — unused and decreasing in value from inflation and fees.
The Hustle reported that most big companies that issue gift cards— like The Cheesecake Factory — don’t receive any of the funds until the money is spent.
Gift cards are a popular choice for gifts because they’re customizable and flexible — they’re basically the “one-size-fits-all” of the gifting world.
“The advantage for the giver is that gift cards are very easy to purchase and they are always the correct size and favorite color of the recipient,” Dorothy Kelly, a personal finance lecturer at the University of Virginia’s McIntire School of Commerce, told Credit Summit. “You never have to worry about the recipient returning the gift for a refund.”
But Steven Meyers, an expert for Credit Summit and professor of psychology at Roosevelt University, said that some don’t like gift cards because they feel impersonal, which could also be a contributing factor for not spending them.
But regardless of the reaction, money on a card is, well, money on a card.
A similar study was conducted by CreditCards.com in July 2022. Ted Rossman, a senior industry analyst with the company, said that while it may be inconvenient to use gift cards at times, ignoring the gift of free money is unwise, reported CNN.