Kids & Money

Don’t let gift cards go unspent

Gift cards once again were among the most popular presents for teens and other young consumers this past holiday season. And that means that once again millions of dollars worth of gift cards will go unspent, like so many lumps of coal.

According to the National Retail Federation, more than 80 percent of consumers bought at least one gift card in 2012. However, it’s a gift that’s often forgotten.

From 2005 to 2011, according to published reports, $41 billion on gift cards went unspent. It’s safe to say that many of those unused cards are buried in your teen’s dresser under a pile of sweat socks, and in similar places across the country.

That’s one reason why I’m not a big fan of these cards. Many are never used, or are used once and forgotten, even though there’s still a balance. Take my word for it, I have several gift cards that still have a few dollars and change on them.

My advice: If you’re going to give a card to your teen, college student or even a 5-year-old, make sure it’s one that you’re dead solid certain will be used.

I like to give gasoline gift cards to my college-age kids because I know it’s something they’ll need, and every penny will be spent down to the last digit.

Federal rules established through the Credit Card Act of 2009 have ended some — but not all — of the confusion and bad business practices surrounding gift card expiration dates and nasty inactivity fees.

The law, which took effect in 2010, prohibits cards from expiring before five years and the levying of fees for one year. This information must also be clearly disclosed on the card or its packaging. So read the fine print. (Note: Rebate cards, which I wrote about last week, are exempt from these rules.)

Gift cards come primarily in two categories — store-branded cards and bank cards.

Store-branded cards can be used only at a specific retailer or groups of retailers generally owned by the same company. Bank gift cards, which carry the logo of MasterCard or Visa, for example, can be used wherever the brand is accepted.

Here are other key points about gift cards:

• Cards probably will be worthless if the company goes out of business. That was a big issue when Borders closed its bookstores. So, use the plastic before you lose it or forget about it.

• If your card expires and there’s still money left on it, call the card company and ask for a new one. They must do this for free or return the remaining balance, according to the website.

• Write down the card number, security code and customer service phone number and keep the information in a safe place. Or ask the person who gave you the card for a copy of the gift receipt so you can verify the card’s purchase in case it is lost or stolen.

• Recycle the plastic. You can turn the cards you don’t want into cash. Among the many sites that act as clearinghouses to buy, sell or trade cards:, and The payout on your plastic depends largely on the popularity of the retailer. You might also be able to trade in your card for a gift card from a favorite retailer.

In addition, some charities will take your gift card and distribute it to those who can put it to use.

Which brings me to my final point about gift cards. Sometimes it’s best to give cash or a check, so you can almost guarantee the gift will be used.