It was the most requested item on people's Christmas lists this year -- and no, it wasn't an iPad, a Kindle or any piece of technology with a touch screen.
According to the National Retail Federation, gift cards topped people's wish lists for the fifth year in a row, with eight out of 10 Americans planning to give at least one person on their list a gift card.
There are many benefits to buying a gift card for someone: They're easy, convenient and something you know the recipient will appreciate. But too often gift cards can be misplaced or forgotten, only to be found years later, long past their expiration date. Worse yet, gift cards can often come with strings attached, such as when they can't be used in combination with other coupons, discounts or special offers.
If you're one of the many people who received a gift card this holiday season, make sure you know the store's gift card policy before you shop. Under the Credit Card Accountability, Responsibility and Disclosure Act, businesses cannot set expiration dates on gift cards any earlier than five years after the date of purchase. Businesses are also prohibited from setting any inactivity fees until the card has not been used for one year.
In Minnesota, businesses generally cannot sell gift cards that have any expiration date or are subject to inactive or dormancy fees, although there are exceptions, according to the Minnesota Attorney General's Office.
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Some exceptions include gift cards issued by banks or credit unions, or cards that are issued to consumers as part of a promotion or loyalty program.
Despite the downside to gift cards, local businesses say they consistently notice a surge in gift card sales during the holiday season.
"It's always a pretty busy time for selling gift cards," said Travis Hanson, manager at Play It Again Sports in Willmar.
While December is a popular time to buy gift cards, the most popular time to redeem them can vary, Hanson said, especially since Play It Again sells many seasonal items.
"When people redeem their gift cards usually depends on what sports they play," Hanson said. "Right now, we're seeing a lot of people use their gift cards for skates and hockey sticks. But if they play a summer sport, they might not come in with their gift cards right away."
While Hanson said he doesn't keep track of how many gift cards are never redeemed, he would guess that there are people who forget about their gift cards if they don't use them immediately.
Just last week, someone came in the store with a gift card from 2009, he said. Since the store's gift cards don't expire, it wasn't a problem. However, gift cards can sometimes "drop out of the computer system" after five or six years, Hanson said, making them unredeemable.
Scott West, owner of the Westwood Café in Spicer, said he does see people using gift cards in January and early February more than any other time of the year.
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"Usually by the end of January, we stop getting them consistently," he said. "That's when it slows down a lot and just becomes normal again."
Only rarely does West see someone come in with a gift card that's more than a year or two old, he said, although the restaurant's gift cards never expire anyway.
"We have a lot of regulars who come in, and their friends will buy them gift certificates every year," West said. "They know that they'll use them. It's a nice gift."
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Even with federal and state regulations in place regarding gift cards, it's still important to manage your gift cards so you don't wind up losing money in the long run. Before you plan a shopping trip to cash in your stack of gift cards, consider these tips.
n Keep track of how much you spend. If you received a $100 gift card and don't want to spend it all at once, take the time to write down how much you have left on it. If you forget to write it down, many retailers print the remaining balance of the gift card on the sales receipt. There are also smartphone apps available, such as GiftCards - Balance Tracker and Wildcard, that keep track of the balance on your gift cards for you.
n Only buy what you need or really want. When you have "free money" to spend, it can be tempting to purchase a higher-priced item and put in a little of your own money. Before you do, ask yourself if the item is something you need or wanted before you had a gift card. It's usually better to save your money and apply the gift card toward something that won't cost you anything, or put it toward something more expensive that you were already planning to purchase anyway.
n Don't forget about those last few dollars. How many times have you decided to skip using your gift card because you only have 50 cents or $1 left on it? Next time, just apply it to your purchase. Some stores also allow you to receive cash back if a gift card goes below a certain balance, so make sure to ask up front about the store's policy.
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n Trade in your gift cards if you don't want them. Every once in a while, a gift giver can have the best of intentions but be completely off the mark in choosing a gift card for you. If that happens, you have options. You can save the gift card and give it to someone else as a gift, but make sure you know the details regarding the card's expiration date and any fees. Another option is to visit websites such as plasticjungle.com and cardpool.com, which allow you to sell back your gift card for cash at a portion of its value. Those sites then sell the gift cards at a discounted rate.
Even with federal and state regulations in place regarding gift cards, it's still important to manage your gift cards so you don't wind up losing money in the long run. Before you plan a shopping trip to cash in your stack of gift cards, consider these tips.
- Keep track of how much you spend. If you received a $100 gift card and don't want to spend it all at once, take the time to write down how much you have left on it. If you forget to write it down, many retailers print the remaining balance of the gift card on the sales receipt. There are also smartphone apps available, such as GiftCards - Balance Tracker and Wildcard, that keep track of the balance on your gift cards for you.
- Only buy what you need or really want. When you have "free money" to spend, it can be tempting to purchase a higher-priced item and put in a little of your own money. Before you do, ask yourself if the item is something you need or wanted before you had a gift card. It's usually better to save your money and apply the gift card toward something that won't cost you anything, or put it toward something more expensive that you were already planning to purchase anyway.
- Don't forget about those last few dollars. How many times have you decided to skip using your gift card because you only have 50 cents or $1 left on it? Next time, just apply it to your purchase. Some stores also allow you to receive cash back if a gift card goes below a certain balance, so make sure to ask up front about the store's policy.
- Trade in your gift cards if you don't want them. Every once in a while, a gift giver can have the best of intentions but be completely off the mark in choosing a gift card for you. If that happens, you have options. You can save the gift card and give it to someone else as a gift, but make sure you know the details regarding the card's expiration date and any fees. Another option is to visit websites such as plasticjungle.com and cardpool.com, which allow you to sell back your gift card for cash at a portion of its value. Those sites then sell the gift cards at a discounted rate.
