Gift cards: Use 'em or lose 'em, study says

gift cardsGift cards are one of the most convenient presents you can give. They're a snap to buy, even easier to wrap and you never have to worry that the recipient will return it because it's the wrong size or color. The down side is that if you stick a gift card in a drawer and forget about it for years, the state can seize those funds as unclaimed property and it's a serious hassle trying to reclaim that money.

According to a new study by, a site that operates a kind of online swap meet for people who want to buy, sell or trade gift cards, the 10 biggest states offer a mixed bag when it comes to dealing with expired or dormant gift cards. All allow funds remaining on gift cards that have expired to be claimed, but the process can be arduous, and some states can claim funds remaining on gift cards after a period of dormancy but before they expire. (So, if you have a card with no expiration date but it's been sitting around for half a decade, your state might have scooped that up.)

Historically, states have always had provisions for claiming unclaimed property such as savings accounts or the contents of safe deposit boxes. Now, they've extended those rules to gift cards. This is problematic because the relative anonymity of gift cards (you don't need to give a name, address or Social Security number to anyone if you buy, give or receive one) makes it almost impossible for gift cards' proper owners to lay claim to the funds before they're seized, says Odysseas Papadimitriou, CEO and founder of CardHub.

Let's say you have a savings account you forgot about (sounds crazy, but it happens). Since the bank has your contact info, they'll make an effort to get in touch with you and let you know the state's going to swoop in and take that cash if the account remains dormant. In the case of a gift card, though, the merchant has no idea who you are and no way to warn you that the value of that card is about to become unclaimed property.

So, what does it take to claim gift card funds that have been seized by the state? First, Papadimitriou suggests contacting the merchant, since it's possible you'll get lucky and be able to use the card after all. In general, just having the number of the gift card isn't enough. Often, you need to provide the name and credit card number of the person who purchased the card, which could be a bit difficult if the giver doesn't remember (or if you don't want to admit to the person who gave you the card that you completely forgot about it!)

CardHub lays out the results of its study and the details for reclaiming gift card funds in the 10 biggest states. One note: The funds must be claimed from the state in which the gift card was bought, not necessarily the state in which you currently reside. If the card wasn't bought in one of these 10 states, contact the unclaimed property or unclaimed funds department of the state in which it was purchased to inquire about the claims process.

In general, it makes more sense to use a gift card shortly after you receive it if you're afraid you'll forget about it. If it's for a retailer you don't like, regift it or recycle it at a site like CardHub. Either way, there's no reason to let a state get those dollars.
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