CHARLOTTE, N.C. -- The gift card business is big business, a $9 billion industry just in 2012 alone. If you got one, read that fine print carefully as some cards might have what called a “dormancy fee.”
It’s a fee that kicks in after one year if the card isn’t used. Every month the card loses a few dollars of value.
Tom Bartholomy from the Charlotte Better Business Bureau said don’t assume the fine print explaining the fee structure is on the card itself.
“If someone just gave you and took off the packaging already, you might be missing valuable information, so call the number or visit the website to see what the fee structure is” said Bartholomy.
Federal law prevents gifts from expiring until five years after they’re bought, but there may be activation fees beyond the initial cost of buying it that you need to know. For example, if you lose the card or if the company goes out of business, then you are out of luck and out the value of the card.
In 2009, $5 billion worth of gift cards went unused and it’s now estimated that Wal-Mart has roughly $1 billion worth of unused gift cards in circulation right now.
RetailMeNot.com, which describes itself as the largest online coupon site in the United States, last week released a survey that suggested 27 percent of Americans acknowledge that they usually only use up to half of the value of gift cards or gift certificates when shopping” according to the Charlotte BBB.
Over $100 million of gift cards were rendered useless or compromised in value in some way in 2008 because of the bankruptcies of Sharper Image, Linens ‘n Things, and other failed retailers with outstanding gift cards.
By the numbers, 61 percent of gift card holders spend more than the gifted amount and 75 percent of gift card shoppers spend 60 percent more than the value of the gift card. Purchases made with a gift card are typically between 20 percent and 50 percent higher than the average purchase price.
Here is a good link that breaks down the laws for gift cards in all 50 states. There are some differences from state to state.