Gift card basics

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Time and again, the question comes up about gift cards and gift card balances and unused gift card balances. This situation is pretty important to be addressed, because every year billions of dollars worth of gift cards are being purchased by people to be given away as gifts to friends and relatives when they are not too sure about what to buy them as gifts. Now the recipients many times get these gift cards, put them away and they get forgotten or they go and spend a certain portion of it and end up leaving an unused balance in their gift cards for months and sometimes even longer and sometimes forget about the existence of the unused balance. This ends up being an utter waste of money. So what do you do and what happens now?

First of all, when you receive a gift card, read the terms and conditions of the gift card. Many gift cards have an expiration date, while most of them do not. If the gift card that you received does have an expiration date, then it is imperative that you use it before the expiration date arrives. If it does not have an expiration date and the company that it is issued with goes bankrupt, then your gift card may likely become useless unless a competitor decides to honor the gift card for a certain percentage of it. For example if you have a gift card for store A and it goes out of business or for some other reason is bought out by chain store B, then store B may choose to honor the card and may choose not to honor the gift card. If they choose to honor it, then you are okay otherwise you are out of luck.

Many states have laws that spell out the fact that a certain percentage of the unused portion of the gift card will go back to the state. Check with your state about its laws. In all cases, leaving an unused balance in a gift card is generally not a good idea. A gift card is not to be construed as an investment vehicle. It is not an investment. It is a gift that someone has given you that may become useless if it is not promptly used. Some gift cards may also have fees associated with maintenance charges and you do not want to be paying those frivolous charges. Thus evaluate the gift cards that you may have received and make sure that you redeem them in a timely fashion.