U.S. consumers have $21 billion in unused gift cards laying around, but they’re in no hurry to use the money.
A new Bankrate study shows nearly half (47%) of US adults say they have at least one gift card, voucher, or store credit on hand.
That averages to $175 a person -- up 51% from $116 a year earlier -- or $21 billion in unused gift card lucre in all.
The notion that each American adult is leaving $175 on the table is a head-scratcher for money experts.
“With inflation at a 40-year high, everyone is looking for ways to save money,” said Ted Rossman, senior industry analyst at CreditCards.com.
“Putting your unused gift cards to work is an easy way to unlock some hidden value. So clean out your wallet, your purse, your junk drawer, your glove compartment -- anywhere these unused gift cards might be hiding. Make a plan to use them before it’s too late.”
Young adults are the most likely to have unused gift cards/vouchers/store credits, with Millennials (ages 26 to 41) holding on to the largest average value.
Particularly, it’s the lowest-income earners who are leaving money on the table.
Some “41% with annual household incomes under $50,000 have an unused gift card/voucher/store credit,” the study noted. “The average value for this group is $128.”
Mastering the Gift-Card Experience
Card usage is unique to individuals, although some commonalities do exist.
“It depends on the shopper and the occasion,” said Shelley Hunter, consumer-gift-card expert at GiftCards.com.
“While some people may forget to use their gift cards, others may be waiting to use them strategically. Research from Blackhawk Network found that shoppers hang on to gift cards if they haven’t found the right item to justify the spending, if they are saving for a larger purchase, or are spreading out their spending in an effort to budget better.”
One factor that doesn't get much attention is that most gift cards aren’t used as gifts at all.
“According to Blackhawk, 58% of consumers purchase gift cards for self-use,” Hunter noted. People intentionally buy gift cards because they consider them a faster, easier, and safer way to pay for things, to take advantage of rewards-based promotions or points offers, or to use as cash for digital purchases.”
“Just because people have unused gift cards doesn’t mean they don’t have carefully planned intentions for them,” Hunter added.
Tips on Getting the Most From Gift Cards
Hunter offers these tips on getting the most out of your gift cards.
• Think of immediate needs. Instead of wasting gift cards on something you don’t want or need, or selling them for less than face value, consider using them to invest in something you won’t want to buy later (e.g., household items, school supplies) or household essentials (e.g., groceries).
“This will save your other funds for a rainy day,” Hunter said. “The Federal Reserve recently reported that Americans are racking up credit-card debt and are turning to credit-card rewards to cushion the blow of inflation and other economic challenges."
“Consequently, gift cards are a great way to tap into found money and avoid taking on debt,” she said.
• Layer gift card purchases with deals and promotions. Nearly half (46%) of respondents to a recent Blackhawk Network survey are buying more products on sale, 44% are buying less expensive brands or generic products, 40% are buying more products on promotion (e.g., buy one, get one), and 33% are using more coupons when shopping.
“Gift cards can help shoppers get even more value out of their money, and can help people afford the brands they are loyal to but had been cutting back on,” Hunter told TheStreet.
• Give the gift that shows you care. If you truly won’t use a gift card or store credit, use it to buy items for people in need.
“Schools, sports teams, and nonprofit organizations regularly need clothes, school supplies, batteries, and food, among other items. You can also give usable gift cards to fundraising efforts to help some great causes,” Hunter added.
